Fortnightly - USEChttp://www.fortnightly.com/tags/usec
enFor the Peoplehttp://www.fortnightly.com/fortnightly/2013/09/people
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Former Progress Energy CEO checks in from his new job at TVA.</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Michael T. Burr, Editor-in-Chief</p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p><strong>Michael T. Burr</strong> is <em>Fortnightly’s</em> editor-in-chief. Email him at <span class="s1"><a href="mailto:burr@pur.com">burr@pur.com</a></span></p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - September 2013</div></div></div><div class="field field-name-field-import-image field-type-image field-label-above"><div class="field-label">Image:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/FR-WilliamJohnson.jpg" width="1180" height="1500" alt="William Johnson, TVA: “If there’s a better way to serve the Tennessee Valley region, then we ought to support that. I think it will be hard to find a better way.”" title="William Johnson, TVA: “If there’s a better way to serve the Tennessee Valley region, then we ought to support that. I think it will be hard to find a better way.”" /></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>Each year in September, we examine the industry’s performance for shareholders, via the annual <a href="http://www.fortnightly.com/fortnightly/2013/09/fortnightly-40-best-energy-companies"><i>Fortnightly 40</i> report</a>. This year, we spoke with senior executives at several investor-owned utilities – Cleco, NorthWestern Energy, OGE Energy, and Wisconsin Energy – to get their perspectives on market forces facing the industry, and the effects on shareholders.</p>
<p>For a different perspective, we also spoke with a former IOU executive who made the switch to the world of public power. William Johnson was CEO of Progress Energy until the company merged with Duke Energy. Although he was expected to become CEO of the new company, the board of directors changed plans on the day the merger closed, in July 2012. Those changed plans sparked an investigation and settlement agreement at the North Carolina PUC. Meanwhile, in November 2012, the Tennessee Valley Authority named Johnson its new CEO.</p>
<p><i>Fortnightly</i> spoke to Johnson about his new job at TVA, about the differences between public power and investor-owned utilities, and about his vision for the future of America’s largest government-owned power provider.</p>
<p><b>FORTNIGHTLY</b> What do you see as TVA’s primary strategic goals in the years and decades ahead? How are these goals different from those of the past?</p>
<p><b>Johnson:</b> One of the great benefits we have as a public power utility is our mission. The reason for our existence is written down in federal statute. There’s not a lot of question about what we’re supposed to be doing every day. We will hew to that mission, which is all about improving the quality of life in the Tennessee Valley through development and stewardship across a broad set of activities. My goal is to keep doing that mission in a way that’s more efficient and more effective. But you can’t find a better mission than the one we have here.</p>
<p><b>FORTNIGHTLY</b> The Baker Center recently released a report (<a href="http://bakercenter.utk.edu/wp-content/uploads/2013/05/Policy-Brief-TVA-May-2013.pdf">http://bakercenter.utk.edu/wp-content/uploads/2013/05/Policy-Brief-TVA-M...</a> ) on the prospect of privatizing TVA. It seems like this question comes around every decade or so, and it never seems to get very far – probably because of complexities like those the Baker Center identified. What’s your perspective on privatizing TVA, and what it means for your plans?</p>
<p><b>Johnson:</b> You’re right, it does come up every decade or so. My view is this: TVA is owned by the people of the United States, and their elected representatives get to decide our future. In the shareholder world, you do a strategic review every year or so. At TVA we’re part of a collaborative process of review, looking at options. If there’s a better way to serve the Tennessee Valley region, then we ought to support that. I think it will be hard to find a better way. The integrated fashion in which we do resource management and produce power, once you take that apart, you lose a lot of efficiencies. New cost centers arise.</p>
<p>I’m looking forward to opportunities to demonstrate the value of this model, and how well it can serve in the future. We’ve had several meetings with OMB [the Office of Management and Budget] and others. It’s still in formative stages, so I don’t have any prediction about how it will come out.</p>
<p>I’ve done my own strategic review over the last six months, including looking at the structure and considering models for what we need to do differently. Like most power producers nationwide, we’ve seen a significant decline in demand and sales. I think it’s more pronounced here than in many parts of the country. You might have read that USEC [U.S. Enrichment Corp.] was shutting down [plants in Ohio and Tennessee]. That’s our largest customer. We’ve had declines in demand, and at the same time spending has increased.</p>
<p>Job 1 is to live within our means. We need to become more efficient and effective, and focus on our costs. We have a very simple business model here: we recover our costs from customers. That means when our costs go up, our rates go up. We desire low rates here, so we can continue to have economic development and job growth. So my first priority is to live within our means, to continue keeping rates low and attracting good jobs to the region.</p>
<p>As part of that we have to decide what to do in terms of resources. The generation plan looks very different today from even a few years ago, as we consider what assets to retire and what assets to modernize. We’re looking to defer or avoid as much growth capital as we can, while retaining high reliability. The basic exercise is good old-fashioned cost management and resource planning.</p>
<p><b>FORTNIGHTLY</b> In addition to cost control, what major issues will affect TVA’s performance in the future?</p>
<p><b>Johnson:</b> A lot of utilities face the same issues, but we have them in a little more expanded form. For example, Fukushima and its effect is particularly important to us, because our nuclear plants are downstream of our hydro dams. So we are very focused on dam safety, stability, and flood protection, making sure safety systems are operable in a probable maximum flood. That will be a focus for us in the next five years.</p>
<p>Also like other utilities we’re dealing with current environmental regulations that mostly affect coal. We expect more regulation of coal plants and that will continue to be an issue.</p>
<p>Evolving technology is of great interest to us. One of our statutory mandates is innovation in energy technology. There’s a law in technology [<i>Amara’s law</i>]: you tend to overestimate the effects of new technologies in the short term, and underestimate the effects in the long term. That’s the case, for example, with renewables and distributed generation (DG). Those things are on the horizon, and the electricity industry has to be thinking about them. How do we integrate them? How do we do pricing? Most pricing today is variable-cost pricing on a kilowatt-hour basis. Do we need to think about recovering fixed costs in a different way? All of that is swirling around us.</p>
<p>Of course it raises issues about the effects on revenue. This is a high fixed-costs business, and you’re always worried about things that upset the equation. On the other hand, we’re interested in serving customers and keeping bills low. We’re interested in efficiency and demand response, simply to lower people’s bills.</p>
<p>At TVA we tend to embrace technology change more than many utilities do. Microgrids and DG are new elements in a system that we’ve been operating for 80 years. It will take us a while to figure out how to incorporate them and have revenue left to cover costs.</p>
<p>In just the last six months I’ve seen a different way of thinking about renewables, DG, and microgrids – not just on an economic standalone basis, but as part of a bigger, integrated supply question. It’s a new twist on these things. Renewables and microgrids can stand together. It’s a good way to look at it, and we look forward to being a part of that discussion.</p>
<p><b>FORTNIGHTLY</b> What’s your view on natural gas and its expanding role as a power fuel? How does the gas price curve affect TVA’s resource plans?</p>
<p><b>Johnson:</b> It’s had a pretty significant effect. For years TVA was coal-centric. A couple of years ago we got 55 percent of our power from coal. Over the last couple of years, with the addition of about 4,000 MW of new combined-cycle gas-fired plants, and plans to retire at least 2,700 MW of coal plants, we do see gas replacing older coal units.</p>
<p>We have some hope of stability over the next decade for gas prices. I think there will be some new regulations around fracking, but they won’t be significant enough to change the basic dynamics of gas pricing. It will continue to be the option of choice. With low capital costs on a megawatt basis, as long as you can take the volatility out of the fuel price, it continues to be a really good option.</p>
<p>A lot of people are sitting on the sidelines. If they had to build new capacity, they’d put in gas-fired plants. But given flat demand, they’re waiting to see what happens next.</p>
<p><b>FORTNIGHTLY</b> TVA recently announced budget cuts and personnel reductions associated with the Bellefonte nuclear construction project. What’s the significance of that, and how does it fit into TVA’s overall nuclear strategy?</p>
<p><b>Johnson: </b>At the moment we’re focused on finishing a nuclear plant, Watts Bar 2. It’s scheduled to be completed and go commercial in the second half of 2015. We have to proceed at Watts Bar, but uncertainty about demand and usage suggests we don’t need Bellefonte as much as we did two or three years ago.</p>
<p>I look at it as husbanding capital, and optionality. We’re focused on finishing Watts Bar 2 on time and on budget, and we’ll continue keeping the Bellefonte option viable, while we wait for more clarity around the fundamentals.</p>
<p><b>FORTNIGHTLY</b> We’ve seen some federal initiatives to move forward on various solutions for spent fuel management. What’s your perspective on that?</p>
<p><b>Johnson: </b>We do no advocacy or lobbying work, so I have no position on any legislation or idea. But the real question we should be asking ourselves as a nation is whether we want to remain in the nuclear power business. If we do, then we have to solve the issue for used fuel. Most people would agree it’s best stored in a couple of locations rather than hundreds of locations. We need to solve that.</p>
<p>I think we need to stay in the nuclear business, because eventually we will have to deal with CO<sub>2</sub>. Nuclear energy is an important piece of that. Also we need to continue dealing with non-proliferation efforts, and staying in the nuclear world makes us an active voice in that effort.</p>
<p>When we get to 2030, many nuclear reactors will be retiring. By 2060, 95 percent of the current nuclear fleet will be retired. So it’s a question we need to start embracing. Do we need to be in the nuclear business? Really we don’t have a choice. We need to be. Once you decide that, it makes it easier to move forward. But how do we make that decision stick? I have no idea. All major decisions ultimately are political questions.</p>
<p>Our country and our government works well when we need to do something. I don’t want to see us get to the point of crisis on this issue, but sooner or later America will have to address the question of whether we must stay in the nuclear business. Once we make that decision, then like minds will agree about what the fuel cycle should look like.</p>
<p><b>FORTNIGHTLY</b> How are you finding your job of managing TVA? How is it different from your experience at Progress Energy?</p>
<p><b>Johnson:</b> The mechanics of the business are the same, in terms of power production and operations. The big differences involve who your stakeholders are. In the IOU model, you’re serving customers for the end result of serving your shareholders. That’s a good model and I’m proud to have been involved with it. But in our model we’re serving the people directly. Our end objectives are a little different. We’re always trying to lower costs, lower rates. It’s a more direct association with our customers – 155 local power companies and more than 50 directly served large industrial end users.</p>
<p>When you get into one of our facilities, engraved in the stone is this phrase: “Built for the people of the United States.” That model and mission has a little different feel.</p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/nuclear-fuel-cycle">Nuclear Fuel Cycle</a></li><li class="taxonomy-term-reference-1"><a href="/article-categories/management-leadership">Management &amp; Leadership</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/frontlines">Frontlines</a></li></ul></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/progress-energy">Progress Energy</a><span class="pur_comma">, </span><a href="/tags/william-johnson">William Johnson</a><span class="pur_comma">, </span><a href="/tags/duke">Duke</a><span class="pur_comma">, </span><a href="/tags/north-carolina">North Carolina</a><span class="pur_comma">, </span><a href="/tags/tennessee-valley-authority-0">Tennessee Valley Authority</a><span class="pur_comma">, </span><a href="/tags/baker-center">Baker Center</a><span class="pur_comma">, </span><a href="/tags/privatization">privatization</a><span class="pur_comma">, </span><a href="/tags/usec">USEC</a><span class="pur_comma">, </span><a href="/tags/business-model">business model</a><span class="pur_comma">, </span><a href="/tags/cost-control">cost control</a><span class="pur_comma">, </span><a href="/tags/fukusihma">Fukusihma</a><span class="pur_comma">, </span><a href="/tags/hydro">Hydro</a><span class="pur_comma">, </span><a href="/tags/dam-safety">dam safety</a><span class="pur_comma">, </span><a href="/tags/flood-protection">flood protection</a><span class="pur_comma">, </span><a href="/tags/amara%E2%80%99s-law">Amara’s law</a><span class="pur_comma">, </span><a href="/tags/renewable">Renewable</a><span class="pur_comma">, </span><a href="/tags/distributed-generation">Distributed generation</a><span class="pur_comma">, </span><a href="/tags/variable-cost">variable-cost</a><span class="pur_comma">, </span><a href="/tags/microgrid">Microgrid</a><span class="pur_comma">, </span><a href="/tags/natural-gas">Natural gas</a><span class="pur_comma">, </span><a href="/tags/fracking">fracking</a><span class="pur_comma">, </span><a href="/tags/bellefont">Bellefont</a><span class="pur_comma">, </span><a href="/tags/nuclear">Nuclear</a> </div>
</div>
Sun, 01 Sep 2013 19:37:56 +0000meacott16746 at http://www.fortnightly.comPeople (September 2011)http://www.fortnightly.com/fortnightly/2011/09/people-september-2011
<div class="field field-name-field-import-category field-type-text field-label-inline clearfix"><div class="field-label">Category:&nbsp;</div><div class="field-items"><div class="field-item even">People</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - September 2011</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p><span class="boldred">New Opportunities:</span> <b>PPL Corp.</b> selected <b>William H. Spence</b>, currently the company’s executive v.p. and COO, as president. Spence replaces James H. Miller, PPL’s president since 2005. Miller will continue to serve as chairman and chief executive officer.</p>
<p><b>Pacific Gas &amp; Electric</b> hired <b>Anthony Earley Jr.</b> as its new CEO. Earley was chairman of DTE Energy. He succeeds Peter Darbee, who resigned in April.</p>
<p><b>Southern Company</b> selected <b>Kenneth E. Coleman</b> as senior v.p. and CIO, succeeding Becky Blalock. Previously, Coleman was v.p. of Alabama Power’s southern division.</p>
<p><b>FirstEnergy Nuclear Operating Company</b> (FENOC) named <b>Roy Brosi</b> director of strategic industry initiatives. Brosi most recently served as director of performance improvement at FENOC’s Beaver Valley Nuclear Power Station.</p>
<p><b>FirstEnergy Solutions</b> named new sales and marketing executives: <b>Julie Hextell</b> will become senior v.p. of sales and marketing, succeeding Arthur Yuan, who plans to retire in 2013. In addition, <b>David Hennekes</b> was named v.p. of marketing. Hextell was COO of SoCore Energy, and Hennekes was v.p. and general manager for the residential division at TXU Energy.</p>
<p><b>Pres. Barack Obama</b> appointed <b>Hawaiian Electric Industries</b> (HEI) President and CEO <b>Constance Lau</b> to serve as a member of the National Infrastructure Advisory Council (NIAC).</p>
<p><b>National Rural Telecommunications Cooperative</b> named <b>Tim Bryan</b> as CEO. Recently, Bryan was CEO of ICO Global Communications, a next-generation satellite company.</p>
<p>Southern Company subsidiary <b>SouthernLINC Wireless</b> appointed as president and CEO <b>Don Horsley</b>, current v.p. of customer services of Mississippi Power. Horsley replaces Bob Dawson, who will retire effective October 1.</p>
<p><b>USEC Inc.</b> appointed <b>Marian K. Davis</b> as v.p. and chief audit executive. She most recently served as senior v.p., corporate internal audit, for Sunrise Senior Living Inc.</p>
<p><b>Corporate Risk Solutions</b> (CRS) named <b>Joe Doetzl</b> as senior manager of consulting services. Doetzl joins CRS from <b>Kansas City Power &amp; Light</b>, where he served as the manager of information security and compliance.</p>
<p><b>Nebraska Public Power District</b> appointed as v.p. <b>Ken Curry</b> to lead the utility’s customer service division. Curry served as project manager for the utility’s strategic planning process.</p>
<p> </p>
<p><span class="boldred">Boards of Directors:</span><b>Great Plains Energy</b> appointed <b>Terry Bassham</b> to its board. Bassham, who is president and COO of both Great Plains Energy and Kansas City Power &amp; Light, assumes the board seat of former President, COO and board member Bill Downey.</p>
<p>Two new members have been elected to the board of directors of <b>American Transmission Co.</b>,<b> Patricia Kampling</b> and <b>Alan Schriber</b>. Kampling is president and COO of Alliant Energy. Schriber was chairman of the <b>Public Utilities Commission of Ohio</b>, and is a former college professor and broadcasting executive.</p>
<p><b>Richard Howorth</b> was elected to serve a five-year term on the <b>TVA</b> board of directors. Howorth was confirmed unanimously by the U.S. Senate taking the seat of former board member Howard Thrailkill whose term expired in May 2010.</p>
<p><b>PPL</b> announced that <b>Venkata Rajamannar Madabhushi</b>, senior v.p. and chief innovation and marketing officer for Humana Inc., joined its board of directors.</p>
<p><b>Southwestern Energy</b> elected <b>Catherine A. Kehr</b> to the board for a term expiring at the annual meeting of stockholders in 2012, at which time her continued service will be subject to stockholder approval. Kehr, who has been appointed as an independent director, has an extensive background within and related to the energy industry.</p>
<p><i>We welcome submissions to People, especially those accompanied by a high-resolution color photograph. E-mail to: <a href="mailto:people@pur.com">people@pur.com</a>.</i></p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/people">People</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/people">People</a></li></ul></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1109cvr.jpg" width="903" height="1200" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/alabama-power">Alabama Power</a><span class="pur_comma">, </span><a href="/tags/alan-schriber">Alan Schriber</a><span class="pur_comma">, </span><a href="/tags/alliant">Alliant</a><span class="pur_comma">, </span><a href="/tags/alliant-energy">Alliant Energy</a><span class="pur_comma">, </span><a href="/tags/american-transmission">American Transmission</a><span class="pur_comma">, </span><a href="/tags/american-transmission-co">American Transmission Co.</a><span class="pur_comma">, </span><a href="/tags/anthony-earley-jr">Anthony Earley Jr.</a><span class="pur_comma">, </span><a href="/tags/barack-obama">Barack Obama</a><span class="pur_comma">, </span><a href="/tags/catherine-kehr">Catherine A. Kehr</a><span class="pur_comma">, </span><a href="/tags/commission">Commission</a><span class="pur_comma">, </span><a href="/tags/communication">Communication</a><span class="pur_comma">, </span><a href="/tags/constance-lau">Constance Lau</a><span class="pur_comma">, </span><a href="/tags/corporate-risk-solutions">Corporate Risk Solutions</a><span class="pur_comma">, </span><a href="/tags/david-hennekes">David Hennekes</a><span class="pur_comma">, </span><a href="/tags/don-horsley">Don Horsley</a><span class="pur_comma">, </span><a href="/tags/dte-energy">DTE Energy</a><span class="pur_comma">, </span><a href="/tags/fenoc">FENOC</a><span class="pur_comma">, </span><a href="/tags/firstenergy">FirstEnergy</a><span class="pur_comma">, </span><a href="/tags/great-plains-energy">Great Plains Energy</a><span class="pur_comma">, </span><a href="/tags/hawaiian-electric">Hawaiian Electric</a><span class="pur_comma">, </span><a href="/tags/hawaiian-electric-industries">Hawaiian Electric Industries</a><span class="pur_comma">, </span><a href="/tags/hei">HEI</a><span class="pur_comma">, </span><a href="/tags/infrastructure">Infrastructure</a><span class="pur_comma">, </span><a href="/tags/james-h-miller">James H. Miller</a><span class="pur_comma">, </span><a href="/tags/joe-doetzl">Joe Doetzl</a><span class="pur_comma">, </span><a href="/tags/julie-hextell">Julie Hextell</a><span class="pur_comma">, </span><a href="/tags/ken-curry">Ken Curry</a><span class="pur_comma">, </span><a href="/tags/kenneth-e-coleman">Kenneth E. Coleman</a><span class="pur_comma">, </span><a href="/tags/marian-k-davis">Marian K. Davis</a><span class="pur_comma">, </span><a href="/tags/mississippi-power">Mississippi Power</a><span class="pur_comma">, </span><a href="/tags/national-infrastructure-advisory-council">National Infrastructure Advisory Council</a><span class="pur_comma">, </span><a href="/tags/national-rural-telecommunications-cooperative">National Rural Telecommunications Cooperative</a><span class="pur_comma">, </span><a href="/tags/nebraska-public-power-district">Nebraska Public Power District</a><span class="pur_comma">, </span><a href="/tags/niac">NIAC</a><span class="pur_comma">, </span><a href="/tags/nuclear">Nuclear</a><span class="pur_comma">, </span><a href="/tags/patricia-kampling">Patricia Kampling</a><span class="pur_comma">, </span><a href="/tags/ppl">PPL</a><span class="pur_comma">, </span><a href="/tags/ppl-corp">PPL Corp</a><span class="pur_comma">, </span><a href="/tags/ppl-corp-0">PPL Corp.</a><span class="pur_comma">, </span><a href="/tags/public-utilities-commission-ohio">Public Utilities Commission of Ohio</a><span class="pur_comma">, </span><a href="/tags/richard-howorth">Richard Howorth</a><span class="pur_comma">, </span><a href="/tags/roy-brosi">Roy Brosi</a><span class="pur_comma">, </span><a href="/tags/southern-company">Southern Company</a><span class="pur_comma">, </span><a href="/tags/southernlinc-wireless">SouthernLINC Wireless</a><span class="pur_comma">, </span><a href="/tags/terry-bassham">Terry Bassham</a><span class="pur_comma">, </span><a href="/tags/tim-bryan">Tim Bryan</a><span class="pur_comma">, </span><a href="/tags/transmission">Transmission</a><span class="pur_comma">, </span><a href="/tags/tva">TVA</a><span class="pur_comma">, </span><a href="/tags/usec">USEC</a><span class="pur_comma">, </span><a href="/tags/usec-inc">USEC Inc.</a><span class="pur_comma">, </span><a href="/tags/venkata-rajamannar-madabhushi">Venkata Rajamannar Madabhushi</a><span class="pur_comma">, </span><a href="/tags/william-h-spence">William H. Spence</a> </div>
</div>
Thu, 01 Sep 2011 04:00:00 +0000puradmin13547 at http://www.fortnightly.comSpent-Fuel Fedcorphttp://www.fortnightly.com/fortnightly/2011/05/spent-fuel-fedcorp
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>The Blue Ribbon Commission’s best answer for the nuclear waste dilemma.</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>John A. Bewick</p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p><b>John A. Bewick</b> is <i>Fortnightly’s</i> contributing editor and formerly was secretary of environmental affairs for the Commonwealth of Massachusetts. He holds advanced degrees in nuclear science and business management.</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - May 2011</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>For America’s nuclear power operators, the future looks more uncertain than it has for almost 30 years.</p>
<p>Among all the complex political, financial and technical issues affecting the country’s nuclear future, the spent-fuel dilemma has proved to be one of the most difficult. However, just as the Department of Energy’s Blue Ribbon Commission on America’s Nuclear Future (BRC) prepares to issue its recommendations for a new approach to spent-fuel management, the Fukushima disaster has focused tremendous public attention on nuclear risks—adding pressure to a problem that already was nearing critical mass.</p>
<p>With the insistent media focus on details of the Fukushima-Daiichi failure, American citizens have learned that spent nuclear fuel pools aren’t protected by containment, and that many such pools have exceeded their designed capacity. This awareness has increased fear of radiation exposure, and fueled growing opposition to nuclear power. Recent polls show support for nuclear power has diminished drastically since before the Fukushima disaster. <i>(See “Nuclear Power in US: public support plummets in wake of Fukushima crisis,” Christian Science Monitor, March 22, 2010)</i>.</p>
<p>This change in support arrives just one year after President Barack Obama abruptly canceled the Yucca Mountain project, leaving DOE without a credible long-term plan for the permanent disposal of U.S. spent nuclear fuel, pursuant to its obligations under the Nuclear Waste Policy Act (NWPA) of 1982. Lawsuits filed by nuclear operators claim damages now reaching $1.8 billion, with the federal government’s legal exposure to such litigation projected to balloon to more than $13 billion over the next decade. According to Kim Cawley with the Congressional Budget Office, each year of delay adds between $300 and $400 million in liabilities to the budget deficit, at a time when Congress is paying intense attention to deficits.</p>
<p>In this context, public trust and confidence in nuclear power seems unlikely to be restored unless, among other things, the federal government defines a credible path forward for developing a repository for spent nuclear fuel. Tasked with finding this path forward, the BRC has been engaged in hearings and technical investigations for more than a year, with draft recommendations expected to be released this summer. Sources tell <i>Fortnightly</i> the BRC likely will advise the federal government to create a new entity to manage disposal of spent nuclear fuel—probably a federal corporation (fedcorp) modeled on TVA.</p>
<p>A spent-fuel fedcorp could remove the constraints of the annual congressional budget cycle, allowing predictable annual financial support and improving the odds that a safe and effective future can be crafted for long-term management of depleted fuel rods and other radioactive materials. Similar approaches in Sweden and Finland have succeeded in moving their spent-fuel storage projects toward construction. And such a fedcorp—the Nuclear Fuels Management Corp.—was proposed in Congress by Sen. George Voinovich (R-Ohio, now retired), first in 2008 ((S.3661), <i>The United States Nuclear Fuel Management Corporation Establishment Act of 2008</i>), and most recently last year (S.3322), with a companion bill sponsored by Rep. Fred Upton (R-Mich.), who now chairs the House Energy &amp; Commerce Committee.</p>
<p>Although the Fukushima crisis might have delayed or even ended the nuclear renaissance, it also has intensified the urgency of fuel-cycle issues. “Spent fuel is one issue that has been on the table in this country for a long time,” Voinovich told <i>Fortnightly</i>. “It has ping-ponged back and forth, and it’s now time to deal with it forthrightly.”</p>
<h4>Why Fedcorp?</h4>
<p>Federal agency management of such a large and complex project through the Department of Energy has failed to produce a spent-fuel storage solution, although the last 20 years have seen many attempts. Numerous factors have conspired to prevent a successful outcome.</p>
<p>First, annual appropriations by Congress fail to insure a consistent level of funding, as priorities within Congress change over time. Plus, executive-branch priorities also change over time; the spent-fuel project has rarely been considered a major federal priority in the last 20 years. It has never been a primary focus of DOE, whose mission is large and complex with multiple priorities.</p>
<p>Moreover, the skill sets at government agencies are different from those in business. As such, DOE’s people arguably lack the expertise, experience and background needed to manage and complete large construction projects.</p>
<p>Also, the siting process adopted by Congress in 1987 proved to be flawed when Congress chose the Yucca Mountain site without adequate technical knowledge of the specifications for such a site or of the geological characteristics of the site. Additionally, by dictating the site without sufficient involvement of either the local or state communities affected, the government generated instant opposition to the project—and that opposition has been unremitting. The ultimate consequence of this choice was the cancellation of the Yucca Mountain project. But more broadly, a top-down federal siting process that discounts local control or input has added to general public resistance to such facilities, and makes it unlikely that other locations will welcome what’s perceived as a national hazardous-waste dump.</p>
<p>Further, designing and constructing the facility turned out to be more technically complex than anticipated, perhaps because there was an assumption it would be easy compared with designing, building and operating a nuclear power plant. But whatever the reason, unexpected technical challenges increased development costs, and pushed Yucca Mountain’s schedule beyond a horizon that could receive consistent support by a federal government that tends to change hands approximately every four years.</p>
<p>Finally, DOE’s failure to begin accepting spent nuclear fuel as required by the NWPA has added to public distrust of nuclear power, since the public sees no credible solution for long-term disposal of spent fuel in a geologically safe environment.</p>
<p>A spent-fuel fedcorp could bring a fresh approach to decision making, and it would benefit from a more stable, long-term funding framework. Additionally, the idea of a fedcorp, at least in principle, enjoys strong support from the industry and its lawmakers. The Nuclear Energy Institute (NEI), representing the utilities that own nuclear power plants, favors the fedcorp model <i>(See “Rethinking Spent Fuel,” February 2011)</i>. Some prominent state regulators are on the record supporting a fedcorp, including Michigan Public Service Commissioner Greg White; and of course the current chairman of the House Energy Committee co-sponsored the Voinovich bill.</p>
<p>However, by itself, a federal corporation structure shouldn’t be considered any guarantee of success, as the failures and foibles of some federal entities have illustrated. The U.S. SynFuels Corp. of the early 1980s provides an instructive example. The project to produce synthetic fuels, primarily from coal, lost its mission when its primary driving force vanished—<i>i.e.</i>, the energy crisis ended, and petroleum prices dropped below the cost of the new fuels to be produced. And another example, Amtrak, continually suffers from the uncertainties of annual congressional appropriations.</p>
<p>There are, however, successful examples of corporations created as public entities with policy direction from Congress, such as the Tennessee Valley Authority (TVA) or more recently the U.S. Enrichment Corp. (USEC)—which was formed by the federal government in the early 1990s, and privatized in 1998.</p>
<p>Both successful and unsuccessful examples provide useful lessons. Several key steps stand out as being critically important in the effort to create a successful fedcorp to manage spent nuclear fuel.</p>
<h4>Step 1: Policy Mandate</h4>
<p>A central question for any new government corporation involves resolving how policy is set, and what functions and responsibilities accrue to the entity. In short, would the fedcorp be expected to craft policy on managing spent fuel, or would it receive such policy from the government?</p>
<p>Jack Bailey, TVA’s director of nuclear operations, argues that Congress and the administration—and not the board of a nuclear fedcorp—must bear the responsibility to establish America’s spent-fuel policy.</p>
<p>“We wouldn’t advocate that this fedcorp in any way establish policy,” Bailey says. “They are merely a tool to implement policy. That direction comes from the administration or the Nuclear Waste Policy Act, or some other legislative vehicle to establish overall policy.”</p>
<p>Bailey does, however, specify functions to be carried out by the fedcorp. “The [fedcorp’s] board—and the management that it would hire—need the flexibility to implement policy as best they see fit, and to manage the money that’s put into the fund in a way that’s most efficient toward achieving the results of the corporation.”</p>
<p>In other words, the fedcorp’s mandate should be firmly established—but it should also give the fedcorp the flexibility it needs to get the job done right.</p>
<h4>Step 2: An Independent Board</h4>
<p>Like any successful corporation, a nuclear waste fedcorp would need strong governance and management expertise. “The board structure needs to include people who understand business,” Bailey says. “It can’t all be political appointees, for example, who have really no knowledge or interest in the business.”</p>
<p>Additionally the fedcorp board should include representation from major stakeholder groups, who will ensure the corporation is directed and managed in an independent way. According to Bailey, TVA has been most successful “when the board has had the ability to act on behalf of its mission without having to worry about a lot of extraneous things, whether they be political or other issues.”</p>
<p>Of course, nuclear waste policy is an intensely political subject, and the fedcorp would need people capable of managing the public-interest aspects of the corporation’s mission.</p>
<p>Some witnesses speaking before the BRC advocated having representatives of the public on the fedcorp board. Others suggest this might be unnecessary, and that simply ensuring proper regulatory oversight by the NRC and EPA would satisfy the need to ensure fair and impartial review of the corporation’s actions. “Remember, any decision [the board members] make is going to be under the National Environmental Policy Act (NEPA), which requires them to engage the public and the environmental groups that might be concerned,” Bailey says. “So it’s going to be a very public process.”</p>
<p>Also, last year’s Voinovich bill specified that the National Association of Utility Regulatory Commissioners (NARUC) would contribute two members to the proposed board of directors. This provision was intended to ensure the interests of customers and state governments are represented in the fedcorp’s decisions.</p>
<h4>Step 3: Independent Funding</h4>
<p>Assuring the continuity of funding from year to year is the most compelling reason to create a new entity that has direct access to the annual revenues from the Nuclear Waste Fund. Without such funding, consistent progress on construction of a repository can’t move forward at a reliable pace. It’s important for public reassurance and to support the huge, long-term financial commitments involved in constructing a spent-fuel repository—and not let the constantly shifting political winds in Washington affect those commitments.</p>
<p>The Nuclear Waste Fund has been the designated repository for ratepayer and utility fees since 1982, with accrued funds (allocated within the federal budget) of about $25 billion, and annual payments of about $750 million. To date, about $10 billion has been spent toward the construction of a permanent repository, mostly on Yucca Mountain.</p>
<p>Both the corpus of the Nuclear Waste Fund and the ongoing ratepayer payments logically might become the principal financial assets of a nuclear waste fedcorp. But transferring either accrued funds or annual contributions to a new fedcorp entity isn’t a trivial matter. For one thing, the Nuclear Waste Fund is earmarked for a permanent repository—as opposed to other options, such as interim storage or on-site casks, for example. Allowing the fedcorp to pursue the most pragmatic approach might require some legislative changes in the fund’s charter.</p>
<p>But perhaps more importantly, the fund presents a difficult budgeting matter for Congress and the Office of Management and Budget (OMB). The issue has caused difficulties for previous efforts at reforming the way the federal government manages the Nuclear Waste Fund. In April 2006, DOE Secretary Samuel Bodman proposed an ambitious plan for managing nuclear spent-fuel and high-level waste, and that plan ran aground reportedly in part because OMB objected to transferring dollars from the Nuclear Waste Fund out of the federal balance sheet. “Funding reform is necessary to correct a technical budgetary problem that has acted as a disincentive to adequate funding,” Bodman stated.</p>
<p>The issue hasn’t improved since 2006. In testimony before the BRC in February, Mike Telson, DOE’s former chief financial officer, said his budget committee and the OMB had engaged in “Talmudic” discussions of this issue—implying such discussions were complex and could’ve gone on forever. Likewise Joe Hezir, a senior official at OMB for decades, explained that budgeting rules have become more restrictive and adverse in the context of transferring funds to a fedcorp. He said:</p>
<p>Such budget conflicts, however, aren’t necessarily deal killers for funding a spent-fuel fedcorp. Bailey of TVA, for example, argues that the $25 billion corpus of the Nuclear Waste Fund isn’t immediately needed to initiate a fedcorp. Annual ratepayer fees would be adequate to get the fedcorp started, and the government could transfer the corpus of the fund to the fedcorp books later—or even leave the fund where it is, and use that fund <i>in situ</i> as an asset to secure bonds issued for financing the fedcorp’s work.</p>
<h4>Step 4: Defined Liabilities</h4>
<p>The major liability that arises in creating a fedcorp involves the federal government’s failure to meet its obligations under the NWPA to assume responsibility for managing spent fuel beginning in 1998. Several utilities and state regulatory agencies have successfully sued the government for compensation arising from its violation and their additional costs for onsite spent-fuel storage. Exposure to this liability would prove problematic for a spent-fuel fedcorp.</p>
<p>In his BRC testimony, Phil Sewell, senior vice president of USEC, reinforced the need to be precise in identifying liabilities and assets as a key component of a making a new fedcorp successful. Further, Bailey of TVA says that no matter where the responsibility lands, paying the federal government’s damages from the waste fund would be indefensible from a legal and policy standpoint. “Essentially [it would be] asking the utilities to pay for their own lawsuit victory,” he says. “Because the money they’re taking is the money we’re paying in. That makes no sense at all.”</p>
<p>And indeed, a federal court in 2002 ruled that settlements from these suits must come out of the Department of Treasury judgment fund, rather than from the Nuclear Waste Fund.</p>
<p>But a fedcorp could also find itself holding the bag for other federal liabilities. For example, DOE has spent more than $7 billion on Yucca Mountain, and that work carries certain liabilities and responsibilities. Arguably they rest with DOE, and not a new entity without any involvement at Yucca Mountain.</p>
<p>If a fedcorp is created, however, then at some point in the future it will assume liability under the NWPA for the federal obligation to take spent nuclear fuel. So in defining fedcorp’s liabilities, policy makers will need to establish a reasonable timeline during which NWPA liabilities transfer to the fedcorp.</p>
<h4>Step 5: Collaborative Approach</h4>
<p>The existing siting process, established by Congress in 1987, hasn’t worked. Instead, it has generated strong opposition from the State of Nevada, led by Senate Majority Leader Harry Reid (D-Nev.). Also, problems that were unknown when the Yucca Mountain site was selected—including water intrusion and cracks in the mountain—have raised issues about its appropriateness as a repository that must, in effect, last forever.</p>
<p>The BRC held hearings at locations that illustrate both success and failure at siting similar facilities. Their investigations took the BRC to Europe and across the United States, and included testimony from many experts on siting issues—as well as from those who express grave concerns and fears about such siting. Almost universally, public officials—from mayors to governors to state legislators—demand a say in approving such sites. Some demand a binding veto. Others ask for a permitting role. Some want the Congress to dictate a site, while others urge a competition from local communities and states for a site with huge financial bonuses—as was the case in Sweden and Finland, where there has been permanent repository siting success <i>(see “<a href="http://www.fortnightly.com/fortnightly/2010/11/life-after-yucca">Life After Yucca</a>,” November 2010)</i>.</p>
<p>In any case, a spent-fuel fedcorp seems likely to succeed only if it can develop a new, collaborative approach to siting nuclear waste facilities. Also, to the degree the fedcorp considers interim storage options, it would need some way to establish credibility that “interim” isn’t a euphemism for “permanent” <i>(see “Tough Questions for Fedcorp”)</i>.</p>
<p>In the <i>Plan D for Spent Nuclear Fuel</i> report—produced by a group of academics, led by Prof. Clifford Singer at the University of Illinois at Urbana-Champaign—a key recommendation is that “every shipment of spent nuclear fuel material should be accompanied by a payment into a Permanent Fund, to be held by the recipient state as long as that material stays in the state… States would receive interest earnings on the Permanent Fund balance beyond any needed to maintain the minimum balance.”</p>
<p>The <i>Plan D</i> report also argues against a single long-term storage site—<i>e.g.</i>, the so-called “monopoly” approach that failed at Yucca Mountain. “A monopoly situation would generate tension within the state and with the federal government over whether the state had obtained adequate compensation,” Prof. Singer wrote. “This could lead to delays or even failure of the whole project again.” He suggested that a more successful process might involve about six finalist states, competing for two or preferably three repository site licenses—with an equal number of spent-fuel aging facilities to be licensed at repository sites.</p>
<h4>Clean Slate</h4>
<p>If the BRC recommends the federal government create a fedcorp to take over the process of siting a repository for spent nuclear fuel, it could establish a clean slate for resolving America’s nuclear waste dilemma. Properly structured, a fedcorp would allow a more rational and sustainable approach to the problem.</p>
<p>However, in order for it to succeed, the mission of such a fedcorp must be clearly defined, its powers carefully delineated, and its financing constructed so as to avoid the delays that have hampered DOE efforts to date.</p>
<p>A spent-fuel fedcorp would face a panoply of complexities in management, funding, legislative authority and structure, as well as legal and financial liabilities—and that’s before it even considers the technical and operational issues of siting, building and running nuclear waste facilities. This combination of complexities and difficulties has stymied progress by the DOE, but a dedicated fedcorp that’s more flexible and sustainably financed might be better positioned to tackle this generational challenge.</p>
<p>And now might be precisely the right time for the fedcorp idea.</p>
<p>A convergence of failures—<i>i.e.</i>, the accident at Fukushima, the cancellation of Yucca Mountain as a permanent repository for spent fuel, and the growing budget impact of litigation settlements related to DOE’s non-performance on its NWPA obligations—already represents a call for action on the safe storage of spent fuel. If proponents of a fedcorp approach are correct, a forthcoming BRC recommendation—and a federal decision to act upon it—could begin the process of turning these failures into a new beginning for America’s policy on nuclear spent fuel.</p>
</div></div></div><div class="field-collection-container clearfix"><div class="field field-name-field-sidebar field-type-field-collection field-label-above"><div class="field-label">Sidebar:&nbsp;</div><div class="field-items"><div class="field-item even"><div class="field-collection-view clearfix view-mode-full"><div class="entity entity-field-collection-item field-collection-item-field-sidebar clearfix">
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<div class="field field-name-field-sidebar-title field-type-text field-label-above"><div class="field-label">Sidebar Title:&nbsp;</div><div class="field-items"><div class="field-item even">&lt;b&gt;Fedcorp: Key Elements &lt;/b&gt;</div></div></div><div class="field field-name-field-sidebar-body field-type-text-long field-label-above"><div class="field-label">Sidebar Body:&nbsp;</div><div class="field-items"><div class="field-item even"><!--smart_paging_autop_filter--><!--smart_paging_filter--><p>When Philip G. Sewell, senior vice president of U.S. Enrichment Corp., testified before the Blue Ribbon Commission on America’s Nuclear Future in February 2011, he addressed what he considered to be the key elements for the establishment and operation of a successful government corporation. They included legislation, corporation assets, existing contracts, the role of the U.S. Treasury, delineation of liabilities, a regulatory oversight path, strong management, and a viable cost structure. Sewell advised:</p><p>• The enacting legislation must be thorough enough to provide the corporation with legal standing to perform its business, establish a strong and independent corporate governance structure, and provide it with means (financial, personnel, regulatory) to be an effective business.</p><p>• The transfer of assets and a clear definition of the value of those assets is necessary to support the organization’s future viability.</p><p>• The government must transfer existing contracts (<i>i.e.</i>, customer, power, services) on favorable enough terms to support business operations.</p><p>• The role of the U.S. Treasury in the management of the corporation’s assets, cash and returns to the government must be defined.</p><p>• There must be a clear delineation of liabilities between the government and the new corporation.</p><p>• A clear regulatory oversight path for immediate term and long-term management of spent nuclear fuel must be established.</p><p>• The new entity needs a strong mix of experienced managers from private and government sectors.</p><p>• There must be a viable cost structure that will support its operations.–JB</p><p> </p></div></div></div> </div>
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<div class="field field-name-field-sidebar-title field-type-text field-label-above"><div class="field-label">Sidebar Title:&nbsp;</div><div class="field-items"><div class="field-item even">&lt;b&gt;Tough Questions for Fedcorp &lt;/b&gt;</div></div></div><div class="field field-name-field-sidebar-body field-type-text-long field-label-above"><div class="field-label">Sidebar Body:&nbsp;</div><div class="field-items"><div class="field-item even"><!--smart_paging_autop_filter--><!--smart_paging_filter--><p>Policy makers considering possible approaches to creating a spent-fuel fedcorp face a critical question, whose answer could spark a potential firestorm of controversy. Specifically, would the fedcorp be authorized to consider all the possible ways to deal with spent fuel, or would its mandate allow only a narrow set of acceptable solutions?</p><p>If the fedcorp gets a broad mandate, then it will have to consider two fundamental questions. First, should we recycle our spent nuclear fuel, the way they do in France and other countries? And second, should storage options include only the possibility of a permanent repository like Yucca Mountain, or should we consider potential interim-storage solutions.</p><p>With regard to the first question, the prospect of recycling or reprocessing spent fuel opens the door to a complex and provocative debate. Specifically, current reprocessing systems are too expensive to be justified on a purely economic basis; in other words, fresh fuel is much cheaper than recycled fuel, even when avoided disposal costs are factored into the price. However, the other side of the argument suggests that current economics might not prevail. Following this rationale, recycling should be part of a long-term plan for spent-fuel management, if only because nuclear fuel represents a finite resource. At the very least, any approach to managing spent fuel shouldn’t foreclose the future possibility of reclaiming the large remaining energy value in stored nuclear waste.</p><p>George Dials, executive vice president of B&amp;W Technical Services Group and former director of the DOE Carlsbad Field Office, told the Blue Ribbon Commission on America’s Nuclear Future (BRC), “I truly believe we are going to need all the energy in the used nuclear fuel that we have in the long-term future for this country.” In his written testimony, Dials stated that a once-through disposal solution “is counter to establishing a complete, closed nuclear fuel cycle… [W]e must establish a commercial nuclear fuel reprocessing/recycling enterprise to sustain our nuclear power capabilities.”</p><p>In addition to hearing such testimony, the BRC visited nuclear power plant facilities in France, and learned about Areva reprocessing technology and facilities in that country. If those actions provide any clue, it’s possible the BRC’s recommendations will at least leave open the door to reprocessing as a solution for future consideration.</p><p>However, economic viability isn’t the only issue affecting the recycling option. The other major issue is proliferation risk. To the degree reprocessing yields plutonium (Pu), it triggers a complex set of policy questions—not only domestic policy, but also U.S. obligations under international non-proliferation treaties dating back to 1969.</p><p>The Blue Ribbon Commission discussed reprocessing spent fuel and proliferation concerns at a hearing in October 2010. Although the hearing spawned many disagreements, one clear fact emerged: If and when a fedcorp addresses the question of whether to pursue reprocessing on any level, then it also will face the question of how to deal with proliferation concerns. As James M. Acton of the Carnegie Endowment for International Peace told the BRC, “This fuel cycle choice would send the message that reprocessing was an essential part of a modern nuclear energy program and enhance the risk that other states would develop PUREX”—<i>i.e.</i>, technologies that produce Pu as a by-product.</p><h4>Interim vs. Permanent</h4><p>In principle and in statute, U.S. policy on spent-fuel management requires the federal government to assume possession of commercial nuclear waste and manage it in a permanent repository. In practice, however, U.S. nuclear operators are storing almost all of their spent fuel onsite—much of it in pools of water, and some in dry casks. Although water pools are supposed to provide only temporary quarters to allow fuel rods to cool down, dry casks are considered an interim solution, which allows nuclear generation to continue while a permanent repository is developed.</p><p>Now, a key question affecting a nuclear waste fedcorp will be whether it can only build permanent storage, or whether one or more centralized interim storage facilities are allowable. Interim storage offers some important advantages—namely an interim facility can be built much more quickly than a permanent repository, and it would provide breathing room for policy makers to define workable long-term solutions—<i>i.e.</i>, either spent-fuel reprocessing, permanent geologic sequestration, or both.</p><p>On the other hand, interim storage would add substantial costs and potentially contentious transportation requirements to the overall challenge of managing spent fuel. It also creates the perception—and arguably the reality—that interim sites would become <i>de-facto </i>permanent sites, posing long-term security and public health concerns. Rather than solving the problem, interim storage might in effect be nothing more than a costly exercise in reshuffling.</p><p>The BRC considered these issues in its deliberations before the Fukushima crisis happened. Since then, risks involving onsite storage of spent fuel have been exposed to the glare of public attention—adding pressure to the BRC’s mission and perhaps changing its perspective on how to prioritize various options.</p><p>In short, the Fukushima disaster has raised a sense of urgency about resolving spent-fuel issues, and potentially driving the BRC—and any prospective nuclear waste fedcorp—toward solutions that reduce the risk of radioactive releases sooner rather than later.–JB and MTB</p></div></div></div> </div>
</div>
</div></div></div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/nuclear-fuel-cycle">Nuclear Fuel Cycle</a></li><li class="taxonomy-term-reference-1"><a href="/article-categories/environmental">Environmental</a></li><li class="taxonomy-term-reference-2"><a href="/article-categories/energy-policy-legislation">Energy Policy &amp; Legislation</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/article_images/1105/images/1105-FEA1.jpg" width="720" height="498" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/barack-obama">Barack Obama</a><span class="pur_comma">, </span><a href="/tags/clifford-singer">Clifford Singer</a><span class="pur_comma">, </span><a href="/tags/commission">Commission</a><span class="pur_comma">, </span><a href="/tags/congress">Congress</a><span class="pur_comma">, </span><a href="/tags/department-energy">Department of Energy</a><span class="pur_comma">, </span><a href="/tags/doe">DOE</a><span class="pur_comma">, </span><a href="/tags/doe-secretary-samuel-bodman">DOE Secretary Samuel Bodman</a><span class="pur_comma">, </span><a href="/tags/epa">EPA</a><span class="pur_comma">, </span><a href="/tags/fred-upton">Fred Upton</a><span class="pur_comma">, </span><a href="/tags/fukushima">Fukushima</a><span class="pur_comma">, </span><a href="/tags/fukushima-disaster">Fukushima disaster</a><span class="pur_comma">, </span><a href="/tags/fukushima-daiichi-0">Fukushima-Daiichi</a><span class="pur_comma">, </span><a href="/tags/funding-reform">Funding reform</a><span class="pur_comma">, </span><a href="/tags/george-voinovich">George Voinovich</a><span class="pur_comma">, </span><a href="/tags/greg-white">Greg White</a><span class="pur_comma">, </span><a href="/tags/harry-reid">Harry Reid</a><span class="pur_comma">, </span><a href="/tags/jack-bailey">Jack Bailey</a><span class="pur_comma">, </span><a href="/tags/joe-hezir">Joe Hezir</a><span class="pur_comma">, </span><a href="/tags/michigan-public-service-commission">Michigan Public Service Commission</a><span class="pur_comma">, </span><a href="/tags/commissioner-greg-white">Commissioner Greg White</a><span class="pur_comma">, </span><a href="/tags/mike-telson">Mike Telson</a><span class="pur_comma">, </span><a href="/tags/naruc">NARUC</a><span class="pur_comma">, </span><a href="/tags/national-association-utility-regulatory-commissioners">National Association of Utility Regulatory Commissioners</a><span class="pur_comma">, </span><a href="/tags/national-environmental-policy-act">National Environmental Policy Act</a><span class="pur_comma">, </span><a href="/tags/nei">NEI</a><span class="pur_comma">, </span><a href="/tags/nepa">NEPA</a><span class="pur_comma">, </span><a href="/tags/nrc">NRC</a><span class="pur_comma">, </span><a href="/tags/nuclear">Nuclear</a><span class="pur_comma">, </span><a href="/tags/nuclear-energy-institute">Nuclear Energy Institute</a><span class="pur_comma">, </span><a href="/tags/nuclear-energy-institute-nei">Nuclear Energy Institute (NEI)</a><span class="pur_comma">, </span><a href="/tags/nuclear-fuels-management-corp">Nuclear Fuels Management Corp.</a><span class="pur_comma">, </span><a href="/tags/nuclear-waste-fund">Nuclear Waste Fund</a><span class="pur_comma">, </span><a href="/tags/nuclear-waste-policy-act">Nuclear Waste Policy Act</a><span class="pur_comma">, </span><a href="/tags/nwpa">NWPA</a><span class="pur_comma">, </span><a href="/tags/phil-sewell">Phil Sewell</a><span class="pur_comma">, </span><a href="/tags/s3322">S.3322</a><span class="pur_comma">, </span><a href="/tags/s3661">S.3661</a><span class="pur_comma">, </span><a href="/tags/senate-majority-leader-harry-reid">Senate Majority Leader Harry Reid</a><span class="pur_comma">, </span><a href="/tags/storage">storage</a><span class="pur_comma">, </span><a href="/tags/tennessee-valley-authority-0">Tennessee Valley Authority</a><span class="pur_comma">, </span><a href="/tags/united-states-nuclear-fuel-management-corporation-establishment-act-2008">The United States Nuclear Fuel Management Corporation Establishment Act of 2008</a><span class="pur_comma">, </span><a href="/tags/tva">TVA</a><span class="pur_comma">, </span><a href="/tags/us-enrichment-corp">U.S. Enrichment Corp.</a><span class="pur_comma">, </span><a href="/tags/united-states-nuclear-fuel-management-corporation">United States Nuclear Fuel Management Corporation</a><span class="pur_comma">, </span><a href="/tags/united-states-nuclear-fuel-management-corporation-establishment-act-2008-0">United States Nuclear Fuel Management Corporation Establishment Act of 2008</a><span class="pur_comma">, </span><a href="/tags/university-illinois">University of Illinois</a><span class="pur_comma">, </span><a href="/tags/usec">USEC</a><span class="pur_comma">, </span><a href="/tags/yucca-mountain">Yucca Mountain</a> </div>
</div>
Sun, 01 May 2011 04:00:00 +0000puradmin14108 at http://www.fortnightly.comPeople (March 2011)http://www.fortnightly.com/fortnightly/2011/03/people-march-2011
<div class="field field-name-field-import-category field-type-text field-label-inline clearfix"><div class="field-label">Category:&nbsp;</div><div class="field-items"><div class="field-item even">People</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - March 2011</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p><span class="boldred">New Opportunities:</span> <b>James H. Lash</b> was promoted to president, <b>FirstEnergy Generation</b> for Akron. Lash is currently president and chief nuclear officer for FirstEnergy Nuclear Operating Co.</p>
<p><b>FirstEnergy</b> also promoted <b>Peter P. Sena</b> to president and CEO of FirstEnergy Nuclear Operating Co., <b>James V. Fakult</b> to president of Maryland Operations, and <b>Dennis M. Chack</b> to president of Ohio Operations.</p>
<p><b>Ohio Edison</b> promoted <b>Donald A. Moul</b> to regional president. Moul was v.p., nuclear support, for FirstEnergy Nuclear Operating Co.</p>
<p><b>Toledo Edison</b> promoted <b>Randall A. Frame</b> to regional president. Frame was director, utility and corporate sourcing, supply chain.</p>
<p><b>Constellation Energy</b> made several changes within its leadership team: <b>Jennifer E. Lowry</b> was named v.p. and treasurer, from assistant treasurer, and <b>Stephen J. Woerner</b> became v.p. and CIO. Previously Woerner was v.p. of transformation. The company also named <b>Reese K. Feuerman</b> to the newly created role of v.p., operational finance. Feuerman was previously CFO and treasurer at Baltimore Gas &amp; Electric.</p>
<p><b>Chesapeake Utilities</b> named <b>William B. Zipf</b> v.p. of Eastern Shore Natural Gas Co.</p>
<p><b>Puget Sound Energy</b> and its parent company, Puget Energy, appointed <b>Steve R. Secrist</b> v.p., general counsel and chief ethics and compliance officer.</p>
<p><b>Dominion Resources</b> promoted <b>Daniel Weekley</b> to v.p. of government affairs.</p>
<p><b>Moanica Caston</b> was elected v.p. of diversity by the <b>Georgia Power</b> board of directors.</p>
<p><b>Ross Ridenoure</b> joined <b>Parsons</b> as v.p. of nuclear energy initiatives. Previously Ridenoure was senior vice president, chief nuclear officer and site manager for Southern California Edison’s San Onofre nuclear plant.</p>
<p>California Gov. Jerry Brown appointed <b>Carla Peterman</b> to the <b>California Energy Commission</b>. Peterman was a researcher at UC Berkeley’s Energy Institute at Haas School of Business.</p>
<p>Washington Gov. Chris Gregoire reappointed <b>Commissioner Philip Jones</b> to a second six-year term on the <b>Washington Utilities and Transportation Commission</b> (UTC).</p>
<p><b>Robert L. Crowell</b> was named head of development at <b>OwnEnergy</b>. Crowell will be responsible for seeing all of the company’s community wind farm projects through construction.</p>
<p><b>Ice Energy</b> named <b>Robert L. Davis</b> as v.p., utility market development. Davis previously was director of strategic planning for R.W. Beck, and a utility analyst for Gainesville Regional Utilities before that.</p>
<p><b>Peter Mastic</b> joined <b>National Wind</b> as president and chief development officer, with overall responsibility for project development and project finance. Mastic was previously founder and CEO of Third Planet Windpower.</p>
<p>The <b>Smart Grid Consumer Collaborative</b> (SGCC) appointed <b>Patty Durand</b> as its full-time executive director.</p>
<p>The <b>Biomass Power Association</b> (BPA) announced that <b>Gary Melow</b> has been appointed state projects coordinator.</p>
<p> </p>
<p><span class="boldred">Boards of Directors:</span> <b>The Babcock &amp; Wilcox Co.</b> named <b>Anne R. Pramaggiore</b> to its board of directors. Pramaggiore is president and COO of ComEd.</p>
<p><b>GridWise Alliance</b> announced that <b>Bob Shapard</b>, chairman and CEO of Oncor, will serve as the next chairman of its board of directors. He succeeds Guido Bartels, general manager of global energy and utilities for IBM.</p>
<p><b>USEC’s</b> board of directors elected <b>M. Richard Smith</b> as a director. Smith brings nearly 40 years of power industry engineering, construction, project management and M&amp;A experience.</p>
<p><b>EnergyHub</b> announced that <b>David Brewster</b> has joined its board of directors. Brewster currently serves as president of EnerNOC.</p>
<p> </p>
<p><i>We welcome submissions to People, especially those accompanied by a high-resolution color photograph. E-mail to: <a href="mailto:people@pur.com">people@pur.com</a></i>.</p>
</div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/people">People</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/people">People</a></li></ul></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/article_images/1103/images/1103-FR.jpg" width="1121" height="1500" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/anne-r-pramaggiore">Anne R. Pramaggiore</a><span class="pur_comma">, </span><a href="/tags/berkeley">Berkeley</a><span class="pur_comma">, </span><a href="/tags/biomass-power-association">Biomass Power Association</a><span class="pur_comma">, </span><a href="/tags/bob-shapard">Bob Shapard</a><span class="pur_comma">, </span><a href="/tags/bpa-0">BPA</a><span class="pur_comma">, </span><a href="/tags/california-energy-commission">California Energy Commission</a><span class="pur_comma">, </span><a href="/tags/carla-peterman">Carla Peterman</a><span class="pur_comma">, </span><a href="/tags/chesapeake-utilities">Chesapeake Utilities</a><span class="pur_comma">, </span><a href="/tags/comed">ComEd</a><span class="pur_comma">, </span><a href="/tags/commissioner-philip-jones">Commissioner Philip Jones</a><span class="pur_comma">, </span><a href="/tags/constellation-energy">Constellation Energy</a><span class="pur_comma">, </span><a href="/tags/daniel-weekley">Daniel Weekley</a><span class="pur_comma">, </span><a href="/tags/david-brewster">David Brewster</a><span class="pur_comma">, </span><a href="/tags/dennis-m-chack">Dennis M. Chack</a><span class="pur_comma">, </span><a href="/tags/dominion">Dominion</a><span class="pur_comma">, </span><a href="/tags/dominion-resources">Dominion Resources</a><span class="pur_comma">, </span><a href="/tags/donald-moul">Donald A. Moul</a><span class="pur_comma">, </span><a href="/tags/energyhub">EnergyHub</a><span class="pur_comma">, </span><a href="/tags/enernoc">EnerNOC</a><span class="pur_comma">, </span><a href="/tags/first-energy">First Energy</a><span class="pur_comma">, </span><a href="/tags/firstenergy">FirstEnergy</a><span class="pur_comma">, </span><a href="/tags/firstenergy-generation">FirstEnergy Generation</a><span class="pur_comma">, </span><a href="/tags/gary-melow">Gary Melow</a><span class="pur_comma">, </span><a href="/tags/georgia-power">Georgia Power</a><span class="pur_comma">, </span><a href="/tags/gov-chris-gregoire">Gov. Chris Gregoire</a><span class="pur_comma">, </span><a href="/tags/gridwise">GridWise</a><span class="pur_comma">, </span><a href="/tags/gridwise-alliance">GridWise Alliance</a><span class="pur_comma">, </span><a href="/tags/ibm">IBM</a><span class="pur_comma">, </span><a href="/tags/ice-energy">Ice Energy</a><span class="pur_comma">, </span><a href="/tags/james-h-lash">James H. Lash</a><span class="pur_comma">, </span><a href="/tags/james-v-fakult">James V. Fakult</a><span class="pur_comma">, </span><a href="/tags/jennifer-e-lowry">Jennifer E. Lowry</a><span class="pur_comma">, </span><a href="/tags/jerry-brown">Jerry Brown</a><span class="pur_comma">, </span><a href="/tags/m-richard-smith">M. Richard Smith</a><span class="pur_comma">, </span><a href="/tags/maryland-operations">Maryland Operations</a><span class="pur_comma">, </span><a href="/tags/moanica-caston">Moanica Caston</a><span class="pur_comma">, </span><a href="/tags/national-wind">National Wind</a><span class="pur_comma">, </span><a href="/tags/nuclear">Nuclear</a><span class="pur_comma">, </span><a href="/tags/ohio-edison">Ohio Edison</a><span class="pur_comma">, </span><a href="/tags/ohio-operations">Ohio Operations</a><span class="pur_comma">, </span><a href="/tags/oncor">Oncor</a><span class="pur_comma">, </span><a href="/tags/ownenergy">OwnEnergy</a><span class="pur_comma">, </span><a href="/tags/parsons">Parsons</a><span class="pur_comma">, </span><a href="/tags/patty-durand">Patty Durand</a><span class="pur_comma">, </span><a href="/tags/peter-mastic">Peter Mastic</a><span class="pur_comma">, </span><a href="/tags/peter-p-sena">Peter P. Sena</a><span class="pur_comma">, </span><a href="/tags/philip-jones">Philip Jones</a><span class="pur_comma">, </span><a href="/tags/puget-sound-energy">Puget Sound Energy</a><span class="pur_comma">, </span><a href="/tags/randall-frame">Randall A. Frame</a><span class="pur_comma">, </span><a href="/tags/reese-k-feuerman">Reese K. Feuerman</a><span class="pur_comma">, </span><a href="/tags/robert-l-crowell">Robert L. Crowell</a><span class="pur_comma">, </span><a href="/tags/robert-l-davis">Robert L. Davis</a><span class="pur_comma">, </span><a href="/tags/ross-ridenoure">Ross Ridenoure</a><span class="pur_comma">, </span><a href="/tags/smart-grid-consumer-collaborative">Smart Grid Consumer Collaborative</a><span class="pur_comma">, </span><a href="/tags/southern-california-edison">Southern California Edison</a><span class="pur_comma">, </span><a href="/tags/stephen-j-woerner">Stephen J. Woerner</a><span class="pur_comma">, </span><a href="/tags/steve-r-secrist">Steve R. Secrist</a><span class="pur_comma">, </span><a href="/tags/toledo-edison">Toledo Edison</a><span class="pur_comma">, </span><a href="/tags/usec">USEC</a><span class="pur_comma">, </span><a href="/tags/washington-utilities-and-transportation-commission">Washington Utilities and Transportation Commission</a><span class="pur_comma">, </span><a href="/tags/william-b-zipf">William B. Zipf</a><span class="pur_comma">, </span><a href="/tags/wind">Wind</a> </div>
</div>
Tue, 01 Mar 2011 05:00:00 +0000puradmin14116 at http://www.fortnightly.comPeople (September 2010)http://www.fortnightly.com/fortnightly/2010/09/people-september-2010
<div class="field field-name-field-import-category field-type-text field-label-inline clearfix"><div class="field-label">Category:&nbsp;</div><div class="field-items"><div class="field-item even">People</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - September 2010</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p><span class="boldred">New Opportunities: </span><b>Duke Energy</b> named <b>Ginny Mackin</b> senior v.p. and chief communications officer. She was executive v.p. and director at Wells Fargo.</p>
<p><b>Pacific Gas and Electric </b>appointed <b>Steve Malnight</b> as v.p. of integrated demand side management within the utility’s customer care organization. He was v.p., renewable energy.</p>
<p><b>Entergy</b> promoted <b>Michele Lopiccolo </b>to v.p., planning and financial communications from v.p., investor relations. She’s succeeded by <b>Paula Waters</b>, formerly director, investor relations. <b>Barrett Green</b> and <b>Mike Twomey </b>join Entergy’s wholesale commodities business, with Green named v.p., finance and risk and Twomey named v.p. external affairs-wholesale. Green was v.p., chief risk officer-designate for Enexus Energy, and Twomey was v.p., utility strategy. <b>Kimberly Despeaux</b> was named senior v.p., federal policy, regulatory and governmental affairs and was v.p. and associate general counsel-federal regulation and policy.</p>
<p><b>The California ISO</b> appointed <b>Steve Berberich</b> to the new role and title of v.p. and COO, from v.p., technology and corporate services. <b>Nancy Saracino</b> assumed the new role and title of v.p., general counsel and chief administrative officer. She continues responsibilities for ISO legal, corporate secretary, internal audit and corporate compliance functions. <b>Peter Ristanovic </b>is hired as v.p. of technology. <b>Jim Detmers</b>, formerly v.p., operations, retired in July.</p>
<p><b>Puget Sound Energy</b> named <b>Kimberly J. Harris</b> president, reporting to CEO <b>Steve Reynolds</b>, in anticipation of adding CEO to her title upon his retirement in 2011.</p>
<p><b>DQE Holdings</b> named <b>Richard Riazzi</b> as president and CEO of <b>Duquesne Light</b> and two related companies. He was CEO and general manager of Chelan County Public Utility District in Washington state. He replaces <b>Morgan O’Brien</b> who left Duquesne Light to become CEO of People’s Natural Gas, which Dominion Resources recently sold to San Francisco-based SteelRiver Infrastructure Fund N.A.</p>
<p><b>American Electric Power (AEP) </b>named <b>Scott N. Smith</b> as v.p. and assistant to the president of Ohio Valley Electric. Smith was v.p., AEP generation business services.</p>
<p><b>Chesapeake Utilities</b> appointed <b>Jeff Householder</b> as president of subsidiary Florida Public Utilities. For the past 10 years he operated a utility consulting practice.</p>
<p><b>Southern Co.</b> announced Georgia Power selected <b>Chris Bell</b> as its v.p. of energy planning and nuclear development. Bell was v.p. of southern wholesale energy for subsidiary Southern Co. Generation.</p>
<p><b>Exelon</b> named <b>Darryl M. Bradford</b> as senior v.p. and general counsel. He was senior v.p., regulatory and energy policy, and general counsel with subsidiary ComEd. He is replaced by <b>Thomas S. O’Neill</b>, who was senior v.p. at Exelon and COO for Exelon Transmission. <b>Ronald J. DeGregorio</b> was named senior v.p. and COO for <b>Exelon Transmission</b>, and was senior v.p., operations support for Exelon Nuclear. He is replaced by <b>Christopher H. Mudrick</b>, now senior v.p., operations support for <b>Exelon Nuclear</b>.</p>
<p><b>Fred Butler</b>, former commissioner on the New Jersey Board of Public Utilities and NARUC president, joined <b>Opower’s industry</b> advisory board. Butler currently serves as executive v.p. for consulting firm, Salmon Ventures Ltd.</p>
<p><b>Jim Howe</b>, former deputy assistant secretary for legislative affairs at Dep’t. of Homeland Security, became director, government relations, for nuclear fuel supplier <b>USEC</b>.</p>
<p><b>Morrison &amp; Foerster</b> hired <b>Blake J. Nelson</b> as of counsel in the firm’s Washington, D.C., energy practice.</p>
<p> </p>
<p> </p>
<p><span class="boldred">In Memoriam: </span><b>The California Public Utilities Commission </b>expressed sadness at the loss of of <b>Dana</b><b>Appling</b>, director of the CPUC’s division of ratepayer advocates.</p>
<p><b>The Ocean Renewable Energy Coalition </b>extended condolences to the family of <b>Mathew</b><b>Simmons</b>, founder of the Ocean Energy Institute and of Simmons &amp; Company International, an energy Investment firm. Simmons passed Aug. 9.</p>
<p> </p>
<p><span class="boldred">Boards of Directors: </span><b>Thomas Kuhn</b>, president of the <b>Edison Electric Institute</b>, was appointed to the <b>Control4 </b>board.</p>
<p><b>Southwest Gas Corp.</b> elected <b>A. Randall Thomas</b> to its board. Thomas retired in 2009 from Deloitte &amp; Touche.</p>
<p> </p>
<p><i>We welcome submissions to People, especially those accompanied by a high-resolution color photograph. E-mail to: <a href="mailto:people@pur.com">people@pur.com</a>.</i></p>
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Wed, 01 Sep 2010 04:00:00 +0000puradmin14137 at http://www.fortnightly.comA Utility Executives' Guide to 2007: A Cloudy Forecasthttp://www.fortnightly.com/fortnightly/2007/01/utility-executives-guide-2007-cloudy-forecast
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Experts predict the top issues that utilities will have to weather this year, and beyond.</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Richard Stavros &amp; Michael T. Burr</p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p><b>Richard Stavros</b> is executive editor and <b>Michael T. Burr</b> is editor-at-large at <i>Public Utilities Fortnightly</i>.</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - January 2007</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>At the dawn of a new year, what will 2007 bring the utilities industry? To paraphrase Charles Dickens, will it be the best of times, or the worst of times? The age of wisdom or the age of foolishness? The season of light or the season of darkness?</p>
<p>Some utility experts are coming to the sobering conclusion that the industry’s darkest hour may be just ahead.</p>
<p>After several years of extraordinary stock performance, improved balance sheets, and restored credibility—not to mention the passage of an Energy Policy Act in 2005 (EPACT) that many utility executives hoped would bring needed consolidation and more infrastructure investment—a number of disturbing trends took shape last year.</p>
<p>First and foremost, the political backlash in Maryland and Illinois against large but necessary rate increases changed the financial calculus utilities were using to manage higher costs and plan for new infrastructure investment.</p>
<p>Moreover, the failed FPL-Constellation and Exelon-PSEG mergers showed the prominent role that state regulatory commissions could play in derailing a merger when rate concessions become too onerous.</p>
<p>FERC Chairman Joseph T. Kelliher, in early December, told Reuters he was “not really” surprised by the failure of these mergers, noting that state blockage of mergers was not a new phenomenon. “Most utilities mergers that have failed in the last 10 years were due to state actions,” he said.</p>
<p>But the merger failures raise the prospect that utilities may not be able to pursue consolidation strategies to achieve greater economies of scale as a way to contain escalating costs.</p>
<p>Furthermore, in late October, the North American Electric Reliability Council (NERC) issued a grim report warning that demand for electricity in the United States is increasing three times as fast as resources can be added, and is threatening to make electric service unreliable in the coming decade.</p>
<p>NERC, which won official certification this past summer as the nation’s Electric Reliability Organization (ERO)—said U.S. demand would increase by about 20 percent from 2006 to 2015, outstripping investment in new power supplies.</p>
<p>“The operation and planning for a reliable and adequate electricity system is becoming increasingly difficult,” said Rick Sergel, CEO of NERC, offering a reason why reserve margins are threatening to fall below required levels.</p>
<p>Of course, the multi-billion-dollar challenges have not been lost on utility executives. In a survey conducted by Cambridge Energy Research Associates (CERA), utilities executives said they expected their companies to face major risks and changes in the coming years from fuel and capital costs, environmental mandates, and potential mergers and acquisitions, as well as long-term investment and technology challenges, to name just a few big issues.</p>
<p>As far as building power plants, CERA respondents predicted possible supply shortfalls in regional markets in the coming years—a shocking revelation. But what may be even more shocking is that utilities do not regard this as their greatest business risk. The top three business risks CERA respondents identified were input commodity price volatility, output commodity price volatility, and a restrictive carbon mandate. How might these issues affect the industry?</p>
<p>In this 2007 Utility Executives’ Guide, <em>Public Utilities Fortnightly</em> provides an overview of how these forecasts and others could shape the industry’s future.</p>
<h4>Mergers, Spinoffs and Interest Rates</h4>
<p>Speaking at Accenture’s International Utilities and Energy Conference (IUEC) late last year in Boca Raton, Fla., Kenneth Marks, managing director at Morgan Stanley, made his predictions for 2007.</p>
<p>“The industry is entering a challenging period. There will be substantial rate increases needed to fund capital expenditures. Commodity prices are likely to remain relatively high, although [they] may come down somewhat, and [be] volatile, putting additional pressure on the need for increased rates. And interest rates are more likely to rise than to fall,” Marks predicted.</p>
<p>These pressures might not drive M&amp;A activity only, but also create the potential for separation transactions or spinoffs—creating “pure plays”—in transmission and generation. Such spinoffs will be driven by the need to enhance shareholder value for the parent company, as well as improve prospects for the spun-off venture.</p>
<p>“While an integrated company may not be willing to leverage up its balance sheet and risk a downgrade in its credit ratings, a stand-alone genco can do this,” Marks said. Additionally, generation companies are valued in the market place on a cash-flow basis at a relatively high metric.</p>
<p>“Merchant gencos are trading about 9 to 10 times 2007 EBITDA, reflecting the benefit of being a pure play and having additional leverage,” Marks said. “By contrast, the nifty 50 utilities trade at about 8 times 2007 EBITDA.” Finally, being a pure-play genco avoids negative synergistic situations where “the temptation of regulators may be to have the generation business subsidize the distribution business.” Moreover, many of the issues associated with managing counterparty credit associated with pure-play gencos have been resolved with the emergence of improved credit offerings and products.</p>
<p>Turning to transmission, Marks advocated the divesture of transmission as a potentially attractive proposition, reflecting increased returns available, better leverage and higher valuation. Additionally, FERC provides an return-on-equity adder as long as the owner of transmission is not deemed to be a market participant, and he said there’s potential to receive a rate-base adder in certain circumstances.</p>
<p>Of course, Marks conceded that several factors impede such a transaction. It’s difficult to separate the transmission business if: 1) It isn’t already in a separate subsidiary; 2) there’s a need from the utility standpoint to replace the earnings of the transmission business; and 3) transmission ownership is perceived as a strategic asset.</p>
<p>Meanwhile, on the mergers and acquisitions (M&amp;A) front, this Morgan Stanley investment banker expects additional M&amp;A transactions, although there will be continuing concerns about state regulatory approvals.</p>
<p>As a result, Marks believes more M&amp;A activity will involve medium and small-cap companies because issues on the regulatory side probably will be easier to manage. “Certainly there will be a focus on combinations that don’t have the obvious issues with regard to federal and state regulatory approvals that the Exelon-PSEG transaction in retrospect had,” he said.</p>
<p>In fact, Rich Charles of Alliance Data Systems told the <em>Fortnightly</em> recently, the canceled Exelon/PSEG and FPL/Constellation mergers suggest the multi-region mega-mergers may not pan out. However, regionally based deals, such as between WPS Resources and Peoples Energy, still will be attractive. “The characteristics of the consumers and commissions are more homogenous; issues affecting one commission are likely affecting neighboring commissions,” Charles said.</p>
<p>Furthermore, Charles foresees utilities emphasizing—and needing to prove—the customer-care benefits of potential mergers more than they have in the past. “Customers are critical of how much they’re spending on electric and gas, and rising fuel costs aside, there’s an assumption that the more you spend, the better service you should receive.”</p>
<h4>Climate Change and NSR</h4>
<p>Hot winds are rising on Capitol Hill, and in courts and statehouses across the country. In 2007 and through the rest of the decade, trends toward tougher environmental regulation—most notably mandatory greenhouse-gas (GHG) constraints—likely will pick up steam, challenging utilities to find effective and economical ways to manage fossil-fuel consumption and carbon emissions.</p>
<p>After the 2006 mid-term elections, the Senate Democratic caucus nominated California Sen. Barbara Boxer to chair the Senate Environment &amp; Public Works Committee. Boxer replaces James Inhofe, R-Okla., the Senate’s most strident skeptic on global-warming issues. As an indication of how this change will affect the legislative agenda in the 110th Congress, Boxer’s first announcement after being named chairwoman included a pledge to advance climate-change legislation. Congress considered GHG constraints in 2006 as part of multi-pollutant legislation (S. 2724 and H.R. 1873) and dedicated climate-change bills (S. 1151 [McCain-Lieberman] and S. 4039 [Kerry-Snowe]).</p>
<p>However, while political winds seem to be blowing in the direction of federal carbon constraints, climate legislation will face a practically insurmountable set of barriers in the 110th Congress—namely, a potential filibuster in the Senate and the veto pen of President Bush. As outgoing Chairman Inhofe stated in a recent press conference: “Our government is not going to embrace economy-killing carbon caps next Congress. Since it only takes 41 senators to defeat legislation, it is hard to imagine any scenario where the McCain-Lieberman bill would pass even two Congresses from now.”</p>
<p>Thus federal carbon constraints probably will not be enacted this year or next. At the same time, however, regulatory pressures are building on several fronts. How those pressures might evolve in 2007 will affect how and when greenhouse-gas constraints might arrive.</p>
<p>For example, the U.S. Supreme Court will rule on Massachusetts v. EPA, in which the U.S. Court of Appeals for the District of Columbia Circuit decided in 2005 that states cannot force the Environmental Protection Agency (EPA) to regulate greenhouse gases under the Clean Air Act (CAA). The lower court produced a fractured ruling, and depending on how the Supreme Court handles the case, it might establish whether states have standing to sue the federal government in future climate-change cases—and, potentially, whether the CAA gives EPA the authority to regulate carbon emissions at all.</p>
<p>“If the court rules global warming is a political question, beyond the scope of the courts, then the litigation filed by attorneys general in these states may not go anywhere,” says Robert Graham, chairman of the environment, energy, and natural resources practice at Jenner &amp; Block in Chicago. “But there might be more to it than meets the eye. The Supreme Court took the case for a reason; it could have just deferred.”</p>
<p>Also, the court’s ruling in Massachusetts v. EPA will send a message to federal and state lawmakers. A ruling for EPA might actually spur legislators forward, to fill the statutory gap. Conversely—and even more ironically—a ruling for the plaintiffs could slow down legislation on climate change. “It might allow Congress to say, ‘We don’t need legislation; let’s see what the EPA gives us in terms of regulation,” Graham says.</p>
<p>In the absence of federal regulation, however, lawmakers in many states are following the example of California and 10 states in the Regional Greenhouse Gas Initiative (RGGI), enacting carbon constraints and emissions-trading schemes. Climate concerns are working their way into other states’ policies as well, creating regulatory challenges for many companies—especially those whose markets cross state borders.</p>
<p>“The regulated community needs consistency and a concerted approach,” says Lewis T. Putman, partner and head of the environmental practice at Milbank, Tweed, Hadley &amp; McCloy in Washington, D.C. “Utilities are hindered in their ability to use their scale-economies to address these issues if there isn’t consistent regulation.”</p>
<p>Meanwhile, the multi-year battle over EPA New Source Review (NSR) regulation might culminate with a Supreme Court verdict in 2007—perhaps reconciling conflicting verdicts from two federal appeals courts in 2005 and 2006.</p>
<p>Late last year, the court heard arguments in Environmental Defense v. Duke Energy (formerly known as EPA v. Duke et al.; the EPA declined to seek certiorari in the case after the 4th Circuit ruled against the agency in 2005.) The court will consider whether a “modification” triggering NSR under the CAA should be defined by plant modifications resulting in greater hourly emissions rates or greater total annual emissions.</p>
<p>The 4th Circuit Court’s decision in Duke seems to directly conflict a 7th Circuit Court decision earlier in the year, in United States v. Cinergy, which upheld the total-annual emissions standard.</p>
<p>How the Supreme Court might rule in Duke is difficult to predict. The court’s first term under Chief Justice John Roberts was marked by several splintered decisions, in which thorny legal questions were left to be resolved by other courts on a case-by-case basis. Such an outcome might occur in Duke. “Physical change which increases the amount of any air pollutant could mean different things in different places,” observed Justice Stephen Breyer during oral arguments on Nov. 1, 2006.</p>
<p>Nevertheless, the outcome of the case might be obviated by changes EPA proposed to its NSR rules in September. The changes explicitly would exempt increases in total annual emissions resulting from increased hours of operation that in principle a plant “could have accommodated” before the modification in question.</p>
<h4>The Future of Nuclear</h4>
<p>If the winds of greenhouse-gas regulation are blowing hot on Capitol Hill, they are whipping up a perfect storm for nuclear energy development, according to Mark Herlach, a partner and head of the nuclear practice group at Sutherland Asbill &amp; Brennan in Washington, D.C.</p>
<p>“The outlook for nuclear-power development is quite good,” Herlach says. “Significant drivers in the world market—concerns about oil and gas prices, global warming, and energy security—have changed the dynamics for nuclear power. The revival is real; the question is how many people will take the plunge and move forward in the short term.”</p>
<p>Developments in 2007 will clarify the answer to that question. Of the approximately 29 Generation III nuclear-reactor projects being considered for sites in the United States, some 17 might submit license applications to the Nuclear Regulatory Commission (NRC) in 2007—a huge milestone, considering the years of preparatory work that go into a nuclear license application. Some of these projects likely will be canceled, however, once the first six projects are selected for federal loan guarantees and up to $500 million in “standby support” authorized under EPACT.</p>
<p>Additionally, 2007 will see major progress in nuclear-fuel enrichment capacity in the United States. Early this year, NRC expects to complete its review of USEC Inc.’s application to build a commercial enrichment facility at the site of the former DOE Lead Cascade centrifuge demonstration plant in Piketon, Ohio, which USEC manages under a five-year license. And last year, construction began at the National Enrichment Facility, a new $1.5 billion gas-centrifuge complex in Lea County, N.M., by a limited partnership including Europe’s Urenco and U.S. utility companies Duke, Entergy, and Exelon.</p>
<p>Recent progress on nuclear-fuel enrichment, if nothing else, serves as a harbinger of things to come—particularly in the context of climate-change policy trends and the November 2006 elections. “People from both sides of the aisle passed EPACT,” Herlach says. “[Sen. Jeff] Bingaman [D, N.M.] was just as supportive of the National Enrichment Facility as [Sen. Pete] Domenici [R-N.M.]. Prospects are good for bipartisan support.”</p>
<p>Such support has strengthened enough to revive hopes for Generation IV approaches—<i>i.e.</i>, “fast” reactors and thorium-fuel designs that could reduce waste-disposal issues and bring other benefits. The DOE launched the Global Nuclear Energy Partnership in 2006, and solicited expressions of interest to build an advanced burner reactor.</p>
<p>But while support for nuclear energy in America has strengthened, opposition has not disappeared. Ongoing delays in the Yucca Mountain waste repository, for example, continue creating uncertainties about long-term alternatives for spent-fuel storage. After two decades and nearly $7 billion of investment, the federal government still is working on a license application for the Yucca Mountain site, and does not expect to complete such an application until 2008.</p>
<h4>Real Value: The Investor’s View</h4>
<p>Veteran utilities analyst Leonard Hyman believes he knows what utility investors want. In his editorial in the Rudden Energy Strategies Report, published late last year by Black &amp; Veatch, he wrote, “What I am proposing is that investors in utilities may have return expectations in the 7 to 9 percent range per year, in nominal terms. If inflation heated up, the expectations would rise, and that would present a problem for utilities because they do not earn inflation-adjusted returns in this country.”</p>
<p>Bankers assert that utilities need to do something (such as M&amp;A) to boost growth rates enough to satisfy investors, he says. But Hyman argues that investors have a pretty good idea of what utilities can achieve, and would be happy to see those modest results realized.</p>
<p>He supports this conclusion with analysis of 199 years of data in the United States. “During that period, investors in common stock earned total returns (dividends plus capital gains) of roughly 2 to 3 percentage points per year more than the bond yield. Bond yields, nowadays, are around 5 to 6 percent. So, investors in stock, based on historical ‘experience,’ would settle for around 7 to 9 percent,” he writes. In fact, any pension fund’s annual report will reveal an expected return of generally 8 percent, he adds.</p>
<p>Morgan Stanley’s Marks says he asked institutional investors (in a limited survey) for their forecast of utility stock prices during the next 18 to 24 months, and their views on valuation.</p>
<p>“Please keep in mind this was a group of long-only investors. Most responded their prices would increase modestly—single digit levels—and drivers cited were expected earnings growth and a stable interest-rate environment,” he said, in contrast to his own prediction that interest rates were more likely to rise.</p>
<p>Furthermore, Morgan Stanley asked these investors to rank the economic factors they believed would most impact the stock.</p>
<p>“By far, the most highly cited factor was commodity prices. The focus on commodity prices reflects the high volatility of commodity prices relative to most other macro economic factors. The impact of changing commodity prices on any utility will, of course, vary depending on whether it is in the long or short position relative to commodity exposure. Notwithstanding the strong relationship between PEs and interest rates … interest rates were deemed less important by investors surveyed.”</p>
<p>Eyeing metrics investors favor in valuing stocks, standard approaches include earnings, cash flow, return on invested capital, discounted cash flow, and the dividend discount model. “About half of the investors said the cash-flow metrics were increasingly used over the last 18 to 24 months,” Marks said. “The others felt there was no discernable change. Investors generally noted that cash flow metrics were much more important in assessing the value of unregulated businesses.”</p>
<p>And with fundamental uncertainties in demand patterns, fuel prices, and regulation, predicting cash flow will remain a rather black art in 2007 and beyond. For regulated utilities—and the unregulated generators that rely on them—the big question remains how regulators will receive utilities’ rate-recovery plans in an era of rising investment needs, commodity prices, and environmental concerns. Utilities’ abilities to manage ratemaking engagements will set the tone in the years to come.</p>
<h4>Recipe for Volatility</h4>
<p>As 2007 begins, natural-gas prices provide an apt metaphor for the utility industry’s business environment.</p>
<p>Natural-gas prices have fallen to levels far lower than many expected to see only 16 months after Hurricane Katrina. But the steady rise of prices since 2003, combined with the post-Katrina pinch, has left utilities understandably wary about natural gas.</p>
<p>“Volatility in the forecast, if not the daily cash market, can be tremendous,” says George Hopley, commodities strategist with Barclays Capital in New York. “The spread has been anywhere from $2 to $15, so people are a little guarded. How do you approach that type of volatility?”</p>
<p>Futures markets have provided limited help, as they have proven to be poor predictors of price trends. Futures prices several months after Katrina were $12 and higher, yet warm-weather conditions pushed spot prices down to $4.</p>
<p>“We have a lot of gas in storage—3.5 trillion cubic feet—but everyone is sensitive now about the weather,” Hopley says. Even average temperatures this winter and summer would result in major storage draw-downs, and extreme temperatures could quickly drive gas prices back into double-digit territory.</p>
<p>In the longer term, the industry’s fortunes will depend on how supply-side constraints are resolved. Permitting processes for liquefied natural gas (LNG) terminals have moved forward, and counterparties are negotiating to resolve disputes over gas quality and interchangeability. But whether gas supplies—from imports or new domestic sources—will keep pace with rising gas demand remains uncertain.</p>
<p>In many respects, 2007 will be a pivotal year. Just as major swings in weather patterns and infrastructure development will determine whether gas remains cheap or returns to levels seen shortly after Katrina, the utility business climate is subject to whipsaw changes in regulation, investment, and technology.</p>
<p>Whether these changes lead toward the best of times or the worst of times might be a matter of perspective. But at least one thing seems certain: 2007 will be an exciting year for almost everyone in the industry.</p>
</div></div></div><div class="field-collection-container clearfix"><div class="field field-name-field-sidebar field-type-field-collection field-label-above"><div class="field-label">Sidebar:&nbsp;</div><div class="field-items"><div class="field-item even"><div class="field-collection-view clearfix view-mode-full field-collection-view-final"><div class="entity entity-field-collection-item field-collection-item-field-sidebar clearfix">
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<div class="field field-name-field-sidebar-title field-type-text field-label-above"><div class="field-label">Sidebar Title:&nbsp;</div><div class="field-items"><div class="field-item even">Timely &amp; Quotable: Experts highlight the industry&#039;s top issues</div></div></div><div class="field field-name-field-sidebar-body field-type-text-long field-label-above"><div class="field-label">Sidebar Body:&nbsp;</div><div class="field-items"><div class="field-item even"><!--smart_paging_autop_filter--><!--smart_paging_filter--><p>“I’m hoping that the backstop authority is like a nuclear weapon whose principal value is in its deterrence and never has to be used.”<br /><em>– Marc Spitzer, FERC Commissioner (on FERC’s electric transmission siting authority)</em></p><p>“We are seeing energy efficiency and demand response becoming intertwined. The customer wants them both and doesn’t really care about the names or terms.”<br /><em>– Dan Delurey, Executive Director, U.S. Demand Response Coordinating Committee</em></p><p>“A Midwest utility [executive] said to me, ‘We have lost so many technical people who were the liaisons with the public utility commission. … The PUC no longer trusts us. We now have regulatory decisions going against us that are costing us billions.’”<br /><em>– Dr. David DeLong, David DeLong &amp; Associates (on aging workforce issues)</em></p><p>“[In a <i>New Yorker </i>cartoon], a couple decides between a 16-slot toaster or a 2-slot toaster version. There’s a serious point in here—one should not confuse higher efficiency necessarily with less energy use. The 16-slot toaster may be more efficient per piece of toast if you use it fully, but it will almost certainly use more energy in real use.”<br /><em>– Ernest J. Moniz, Cecil and Ida Green Professor of Physics and Engineering Systems, Massachusetts Institute of Technology</em></p><p>“In the U.S., clearly, the thing that will push nuclear power off the starting line is a CO<sub>2</sub> policy. Most utility executives believe that post 2010, 2011, 2012, there will be a CO<sub>2</sub> policy, whether that is a tax, a credit, or a cap and trade.”<br /><em>– James Reinsch, president, Bechtel Nuclear</em></p><p>“If you don’t have legislation to support [climate-friendly] development, you kill the profit-and-loss proposition of utilities that will implement the solution. Legislation is imperative to orient the market toward a carbon-trading regime and allow utility leaders to justify development that carries a 15- to 20-percent cost premium.”<br /><em>– Philippe Joubert, President, Alstom Power</em></p><p>“My thesis would be that utilities shouldn’t worry too much about inventing stuff. Perhaps funding some programs in the right places. … But I would worry a great deal about the innovation process that occurs, to understand those inventions and how to get them commercialized.”<br /><em>– Omar Abbosh, Accenture (on utilities and technology)</em></p><p>“We must first get the technology ready to address CO<sub>2</sub>, not the policy. If you put policy before technology, you won’t get the result you want.”<br /><em>– Brad Jones, vice president, TXU Generation</em></p><p>“Now, there are some things on the horizon I think that could seriously reduce energy consumption. I think LED lighting, for example, is one thing that you really have to watch. It saves 70 percent of electricity compared with regular signage and light bulbs. If that catches on, that’s going to be a global phenomenon”<br /><em>–Roger Goodman, Cambridge Energy Research Associates</em></p><p><i>Editor’s Note: Some quotes were taken from presentations made at Accenture’s International Utilities and Energy Conference (IUEC) and Power-Gen International in late 2006. </i><i> </i></p></div></div></div> </div>
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</div></div></div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/strategy-planning">Strategy &amp; Planning</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/article_images/0701/images/0701-FEA1.jpg" width="1091" height="1500" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/accenture">Accenture</a><span class="pur_comma">, </span><a href="/tags/barclays">Barclays</a><span class="pur_comma">, </span><a href="/tags/barclays-capital">Barclays Capital</a><span class="pur_comma">, </span><a href="/tags/caa">CAA</a><span class="pur_comma">, </span><a href="/tags/cash-flow">cash flow</a><span class="pur_comma">, </span><a href="/tags/cinergy">Cinergy</a><span class="pur_comma">, </span><a href="/tags/clean-air-act">Clean Air Act</a><span class="pur_comma">, </span><a href="/tags/commission">Commission</a><span class="pur_comma">, </span><a href="/tags/congress">Congress</a><span class="pur_comma">, </span><a href="/tags/constellat">Constellat</a><span class="pur_comma">, </span><a href="/tags/constellation">Constellation</a><span class="pur_comma">, </span><a href="/tags/doe">DOE</a><span class="pur_comma">, </span><a href="/tags/duke-energy">Duke Energy</a><span class="pur_comma">, </span><a href="/tags/energy-policy-act">Energy Policy Act</a><span class="pur_comma">, </span><a href="/tags/entergy">Entergy</a><span class="pur_comma">, </span><a href="/tags/environmental-protection-agency">Environmental Protection Agency</a><span class="pur_comma">, </span><a href="/tags/epa">EPA</a><span class="pur_comma">, </span><a href="/tags/exelon">Exelon</a><span class="pur_comma">, </span><a href="/tags/ferc">FERC</a><span class="pur_comma">, </span><a href="/tags/ghg">GHG</a><span class="pur_comma">, </span><a href="/tags/it">IT</a><span class="pur_comma">, </span><a href="/tags/james-inhofe-0">James Inhofe</a><span class="pur_comma">, </span><a href="/tags/massachusetts-v-epa-0">Massachusetts v. EPA</a><span class="pur_comma">, </span><a href="/tags/morgan-stanley">Morgan Stanley</a><span class="pur_comma">, </span><a href="/tags/nerc">NERC</a><span class="pur_comma">, </span><a href="/tags/nrc">NRC</a><span class="pur_comma">, </span><a href="/tags/nuclear">Nuclear</a><span class="pur_comma">, </span><a href="/tags/nuclear-regulatory-commission">Nuclear Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/permitting">Permitting</a><span class="pur_comma">, </span><a href="/tags/regional-greenhouse-gas-initiative">Regional Greenhouse Gas Initiative</a><span class="pur_comma">, </span><a href="/tags/reliability">Reliability</a><span class="pur_comma">, </span><a href="/tags/rggi">RGGI</a><span class="pur_comma">, </span><a href="/tags/storage">storage</a><span class="pur_comma">, </span><a href="/tags/us-supreme-court">U.S. Supreme Court</a><span class="pur_comma">, </span><a href="/tags/usec">USEC</a><span class="pur_comma">, </span><a href="/tags/usec-inc">USEC Inc.</a><span class="pur_comma">, </span><a href="/tags/yucca-mountain">Yucca Mountain</a> </div>
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Mon, 01 Jan 2007 05:00:00 +0000puradmin13980 at http://www.fortnightly.comWinners and Losers: Utility Strategy and Shareholder Returnhttp://www.fortnightly.com/fortnightly/2004/10/winners-and-losers-utility-strategy-and-shareholder-return
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Diversified companies lead (and the globals lag) over the past five years.</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>James Coyne and Prescott Hartshorne</p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p><b>James Coyne</b> is a senior managing director and <b>Prescott Hartshorne</b> is a managing director for FTI Consulting’s electric industry strategy practice. Contact Coyne at <a href="mailto:james.coyne@FTIConsulting">james.coyne@FTIConsulting</a>. com.</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - October 2004</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>The unbundling of services and companies in the electricity and natural gas industries have created unprecedented opportunities to reinvent the traditional integrated utility model, with a broader array of attendant risks and rewards. But this past year was clearly one of retrenchment and strategic soul searching, allowing an opportunity to re-examine the sector for winning business formulas.</p>
<p>Our prior research over the restructuring period of 1998-2002 showed that the modest yet steady profits of companies with a high degree of rate regulation easily won out over flash-in-the-pan step-out strategies. Companies like Exelon and Southern Co. reigned, while companies like Aquila and Dynegy faltered. A return to regulated roots ensued.</p>
<p>This year, relying upon the same financial metrics we used in this earlier investigation, the current study focuses on the shareholder returns for 66 companies in the energy value chain that are listed in the Fortune 1000.</p>
<h3>Shareholder Returns: Outperforming Other Industries</h3>
<p>Figure 1 illustrates annual shareholder returns from 1999-2003. This time frame is long enough to capture the impacts of strategic decisions and investment cycles that take years to unfold. The companies are arrayed according to five-year performance, grouped by quartiles. Based on shareholder return and an examination of the basic differences in the business models of these companies, several observations emerge.</p>
<p>During the five-year period, the median annualized shareholder return for the entire group of companies was 4.7 percent, a notable increase over last year's 2.6 percent five-year return, reflecting both improvements in the stock market in general and fewer significant losses announced in the 2003 fiscal year compared to 2002. As much as energy and utility companies have been maligned in the industry and financial press, the group of 66 companies has actually outperformed the broader market. Over the five-year period, the mean group return of 1.8 percent has outpaced the Standard and Poor's average annual return of (0.6) percent. The reality is that many of these companies have provided favorable returns during a period of turmoil in the broader market, particularly over the negative market years of 2000-2002. The surprise has been the business failures from this previously trustworthy sector.</p>
<h3>Return of the Merchants</h3>
<p>There were six companies that scored in the top quartile for each of the five-year, three-year, and one-year periods ending Dec. 31, 2002, but none achieved that triple-play in 2003. Indeed, the vast majority of this year's top-quartile one-year performers are last year's laggards, a group composed primarily of energy merchants. Three of the top five in annual returns included The Williams Companies, Dynegy, and AES. This shift in performance is evident in the ranking of top-quartile returns, shown below in Table 1.</p>
<h3>Best Sustained Performance</h3>
<p>Last year's results listed Exelon Corp., Western Gas Resources, and UGI Corp. as the leaders of the five-year, three-year and one-year shareholder return categories, respectively. This year's winners in those categories are Western Gas Resources (5-Year: 53.7 percent), UGI Corp. (3-Year: 32.4 percent) and The Williams Cos. (1-Year: 265.7 percent). Exelon fell off the top of the leader's list primarily because its five-year performance no longer includes 1998-a stellar year for its shareholders-when the company successfully positioned itself for deregulation. The Williams Companies took over from UGI Corp. as the leader in the one-year return category because of Williams' meteoric recovery from near disaster in 2002.</p>
<h3>Business Risk and the Efficient Frontier</h3>
<p>Portfolio management theory dictates that greater risks should yield greater returns. The portfolio combinations of risks and returns that optimize these trade-offs are on the "efficient frontier." The same analysis can be applied to corporate business models. Figure 2 illustrates the risk and reward profiles represented by the universe of 66 companies in our study. The chart compares average shareholder returns for the group against the volatility (or risk) of those returns. Moving from left to right on the chart implies greater risk and, therefore, the expectation of higher earnings. In fact, however, many of the higher risk companies have provided significantly lower returns.</p>
<p>The overall shareholder return winner for the period, Western Resources, achieved a 54 percent average annual return with a 16 percent level of risk (standard deviation in monthly shareholder return). Calpine returned 9 percent to its shareholders over this period, but that was coupled with a 28 percent risk quotient. Moving to lower levels of risk, an investor could have achieved 10 percent to 23 percent average returns at 7 percent to 10 percent levels of risk with the group of companies centered in the northwest quadrant.</p>
<p>Of these, an investor might prefer UGI's 23 percent return and 7.4 percent risk, or New Jersey Resources' 12 percent return and only 4.3 percent risk. Companies with lower returns or higher risks are simply less attractive-unless, of course, their business prospects are not reflected by their past performance.</p>
<h3>Diversified Business Models Are Working</h3>
<p>The group of companies that delivered top-quartile five-year annualized shareholder returns is dominated by diversified energy companies. Last year's report highlighted the enduring contributions from regulated returns. This year, only five of the 17 top-quartile companies derived more than 75 percent of their revenue from regulated operations (Entergy Corp., Southern Co., PNM Resources Inc., Keyspan Corp., and Piedmont Natural Gas Co.). Diversification is paying off, or at least it is not overwhelming solid results from regulated operations.</p>
<h3>Natural Gas Value Chain Boosts Returns</h3>
<p>This year, companies with significant natural gas operations were clear leaders in the 5-year average annual return category. This group includes companies with natural gas exploration and production, and distribution businesses. Clearly, those companies with upstream investments have benefited from the sustained increases in natural gas prices. Western Gas Resources, a company with operations concentrated in natural gas exploration and production, led the five-year shareholder return category with a 53.7 percent annualized performance, as shown in Table 2. Overall, companies deriving 50 percent or more of their revenue from natural gas operations earned a median return of 5.9 percent, compared with the 4.7 percent group median. Table 2 also shows that many companies with proved oil and gas reserves were among the top performers in 2003, averaging a 6.7 percent five-year average annual return (8.7 percent if The Williams Cos. and El Paso Corp. are removed).</p>
<h3>Overseas Trouble</h3>
<p>Companies with substantial foreign investments continue to be plagued by those choices. Of the top six companies in terms of revenues from international operations, four have been bottom quartile, providing negative shareholder returns. Responding to these challenges, many companies have reduced their international exposure over the past year. Some recent international withdrawals include TXU Corp.'s exit from its retail electric and gas businesses in the UK and Australia, El Paso's withdrawal from its Czech generation business, and Duke's sale of its Asia-Pacific assets. Nevertheless, PPL Corp. and Sempra continue to perform well even with their international investments, perhaps owing in part to each company's solid base of domestic regulated utility operations. Table 3 (p. 32) shows some reduction in international exposure but belies the fact that most of the recent sales of international operations are still included as discontinued operations in the 2003 financial statements.</p>
<h3>Lightening the Debt Load: The South Beach Balance Sheet</h3>
<p>This past year was one of de-leveraging for U.S. energy companies, following the debt binge that accompanied diversification and expansion in the 1999-2002 period. Figure 3 illustrates the total cycle.</p>
<p>Last year, we saw a strong correlation between overleveraging and negative five-year shareholder returns. That correlation holds for this year as well, as shown in Table 4.</p>
<p>However, we note the significant progress made by Allegheny Energy Inc., AES Corp., Centerpoint Energy Inc., and Edison International to improve their balance sheets over the past year. Most of this progress was accomplished through asset sales, with Allegheny selling generation and other non-regulated businesses, and AES raising over $700 million through the sale of CILCORP and several international generating facilities, for example.</p>
<h3>Efficient Use of Capital</h3>
<p>Return on Invested Capital (ROIC) continues to be an excellent indicator of a company's ability to provide sustained long-term returns to shareholders. ROIC is a more stable measure of financial performance than shareholder returns since it depends on earnings and not on volatile stock prices. Table 5 () shows that the consistent ROIC performers primarily have been the natural-gas-oriented companies. This may be attributed to three factors: the avoidance of the troubled merchant investments of their electric peers, the relative stability of their regulated gas distribution businesses, and the upside from investments in upstream natural gas operations.</p>
<p>FPL Group is the only company without substantial natural-gas operations to make the list of companies returning top-tier ROIC. FPL has benefited from the state of Florida's consistent stance of not deregulating its electric markets, which perhaps, combined with a performance-based rate plan put in place in 2002, has provided returns at a premium to peers. Also, FPL's merchant energy strategy has been relatively conservative, representing less than 10 percent of 2003 total revenue.</p>
<p>The utility sector, once characterized by a homogeneous group of vertically integrated companies, has morphed into a group of energy companies with divergent business strategies. Financial performance of the group, in aggregate and across companies, has been volatile over the past several years. Clear winners and losers emerged from this era of restructuring.</p>
<h3>Winners</h3>
<p>The five-year shareholder return numbers illustrate that companies with strong regulated enterprises, accompanied by upstream investments in oil and gas, have surpassed their peers. Companies focused on the natural gas businesses in general have outperformed their electric peers. Diversification has begun to pay-off for shareholders. Six of the top-quartile companies possessed oil and gas reserves. Only five of the top-quartile companies derived over 75 percent of their revenues from regulated businesses. However, those without stabilizing regulated core franchises have suffered. Of the merchants in the group, only Calpine has managed to show positive shareholder returns during the period.</p>
<h3>Losers</h3>
<p>Losing companies include those that have been slow to extract themselves from the merchant energy morass, those who gambled and lost in international markets, and those still smarting from over-leveraged balance sheets. Regulatory risk and unresolved litigation also have been detrimental.</p>
<p>A twist in these conclusions is that today's relatively pure-play regulated utility may be a winner only by virtue of not losing in the latest round of alternative step-out strategies. These companies may prove to be tomorrow's losers by not demonstrating significant growth potential. This is because today's energy investors want it both ways: As alternative investments become more attractive, a safe regulated return is welcome, but it may be overshadowed by competitors with well-conceived growth strategies.</p>
<p>Diversification has been a double-edge sword for the industry. Merchant strategies in general have not paid off over the past five years, while investments in the upstream have. Clearly, these results are subject to market cycles. Upstream returns may have neared their peak, while the merchant segment of the business may have hit its near-term trough.</p>
<p>We believe low single-digit returns are unsustainable for the sector in the long run given that the average cost of capital for this group of companies is near 10 percent. We expect three trends to emerge from what we perceive to be an imbalance between risk and reward for shareholders. First, some companies will continue to retrench around core regulated enterprises, stabilizing lower-risk returns. Those in favorable regulatory climates, with underlying service area growth and efficient operations, are likely to outpace their peers. Second, growth-oriented diversified companies will emerge with somewhat more volatile but higher sustained earnings. Lastly, specialized non-diversified companies (such as merchants) will eventually capture substantially higher returns during market cycle upside swings, but it remains to be seen if the risk/reward trade-off will eclipse that of their peers.</p>
<p>Five-year returns of the group will therefore migrate to approach double digits within three years as the 2002 trough becomes a starting point for recovery for the troubled merchants. The group average will, however, continue to reflect strategic choices by individual companies out of sync with market and regulatory forces that frame the winning business formula.</p>
<p>The restructured energy market affords more opportunity for both success and failure on a going- forward basis.</p>
<p> </p>
<h3>Endnote</h3>
<p>1. Includes companies listed in the "Energy," "Pipelines" and "Utilities: Gas and Electric" industries of the 1000 index as compiled on April 5, 2004, excluding Adams Resources &amp; Energy, Hawaiian Electric Industries, Kinder Morgan Energy, TransMontaign, Plains All America Pipeline, Ferrell Gas Partners, Enbridge Energy Partners, USEC, and Oglethorpe Power (not comparable business models); and Mirant (insufficient stock price history).</p>
</div></div></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-department field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Department: </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/department/business-money">Business &amp; Money</a></li></ul></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
<div class="field-items">
<a href="/tags/aes">AES</a><span class="pur_comma">, </span><a href="/tags/aes-corp">AES Corp.</a><span class="pur_comma">, </span><a href="/tags/allegheny-energy">Allegheny Energy</a><span class="pur_comma">, </span><a href="/tags/calpine">Calpine</a><span class="pur_comma">, </span><a href="/tags/centerpoint-energy-0">CenterPoint Energy</a><span class="pur_comma">, </span><a href="/tags/dynegy">Dynegy</a><span class="pur_comma">, </span><a href="/tags/edison-international">Edison International</a><span class="pur_comma">, </span><a href="/tags/entergy">Entergy</a><span class="pur_comma">, </span><a href="/tags/exelon">Exelon</a><span class="pur_comma">, </span><a href="/tags/hawaiian-electric">Hawaiian Electric</a><span class="pur_comma">, </span><a href="/tags/hawaiian-electric-industries">Hawaiian Electric Industries</a><span class="pur_comma">, </span><a href="/tags/kinder-morgan-energy">Kinder Morgan Energy</a><span class="pur_comma">, </span><a href="/tags/new-jersey">New Jersey</a><span class="pur_comma">, </span><a href="/tags/piedmont-natural-gas">Piedmont Natural Gas</a><span class="pur_comma">, </span><a href="/tags/pnm-resources">PNM Resources</a><span class="pur_comma">, </span><a href="/tags/ppl">PPL</a><span class="pur_comma">, </span><a href="/tags/ppl-corp">PPL Corp</a><span class="pur_comma">, </span><a href="/tags/ppl-corp-0">PPL Corp.</a><span class="pur_comma">, </span><a href="/tags/return">Return of</a><span class="pur_comma">, </span><a href="/tags/return-0">Return on</a><span class="pur_comma">, </span><a href="/tags/sempra">Sempra</a><span class="pur_comma">, </span><a href="/tags/usec">USEC</a><span class="pur_comma">, </span><a href="/tags/williams">Williams</a><span class="pur_comma">, </span><a href="/tags/williams-companies">Williams Companies</a> </div>
</div>
Fri, 01 Oct 2004 04:00:00 +0000puradmin11100 at http://www.fortnightly.comPeoplehttp://www.fortnightly.com/fortnightly/2004/06/people
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>New Opportunities:</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>We welcome submissions to People, especially those accompanied by a high-resolution color photograph. E-mail to: <a href="mailto:photos@pur.com">photos@pur.com</a></p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - June 2004</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><blockquote><h1 class="dept">People</h1>
<h3>New Opportunities:</h3>
<p>Southern Co. chose <b>Francis S. Blake</b> to stand for election to its board of directors. Blake is an executive vice president at The Home Depot. Blake's election would bring the board to 11 members.</p>
<p>Mirant announced that <b>M. Michele Burns</b> is the company's new CFO and executive vice president, charged with leading the company's financial restructuring. Burns previously has been executive vice president for Delta Air Lines Inc. and a partner with Arthur Anderson LLP.</p>
<p>The Midwest Independent Transmission System Operator (MISO) hired <b>John R. Bear</b> as its first COO. Bear also will serve as senior vice president of the organization. Bear comes to MISO from Reliant Resources Inc., where he was president for the mid-atlantic and mid-continent Regions.</p>
<p>Former Edison Electric Institute (EEI) Vice <b>President E. John Neumann</b> joined USEC Inc. as vice president of government relations. He had been with EEI for nine years.</p>
<p>The Western Electricity Coordinating Council appointed <b>Kwin Peterson</b> as the council's communications specialist. Peterson has previous experience in arts-related marketing in Utah.</p>
<p><b>Ed Wilmot</b> will succeed <b>Ralph Erikson</b> as manager of the Los Alamos Site Office of the National Nuclear Security Administration (NNSA). Wilmot has monitored NNSA's Savannah River Site Office since December 2003.</p>
<p>Dominion named <b>Richard Zelenko</b> vice president of Dominion Retail Inc. and vice president of Dominion Products and Services Inc. He has been general manager of Dominion Retail since 2001.</p>
<p>PG&amp;E Corp. elected <b>Russell M. Jackson</b> vice president of human resources. He had held the same position at PG&amp;E Corp.'s Pacific Gas and Electric Co. since 1999.</p>
<p>Texas Gov. <b>Rick Perry</b> appointed <b>Barry T. Smitherman</b> to the state's Public Utility Commission. Smitherman has been an assistant district attorney since January of last year.</p>
<p><b>William N. Outlaw</b> is the new director of communications for the Nuclear Regulatory Commission (NRC). Also, <b>Eliot B. Brenner</b> joined NRC as director of its Office of Public Affairs. Outlaw comes to NRC from the Federal Highway Administration; Brenner has been a communications consultant since 2001.</p>
<p>Cleco Corp. promoted its CFO, <b>Dilek Samil</b>, to executive vice president. Samil had been serving Cleco as its CFO and senior vice president of finance.</p>
<p>The Southwest Power Pool Regional State Committee, during its first official meeting, elected <b>Denise Bode</b> as its president, the Daily Oklahoman reports.</p>
<p>Constellation Generation Group, a subsidiary of Constellation Energy, appointed <b>David L. Rehn</b> as senior vice president of fleet optimization. Rehn had been president and CEO of Rovsing Dynamics since 2000.</p>
<p>The Washington Utilities and Transportation Commission named <b>Glenn Backmon</b> acting director of its regulatory services division while the current director, <b>Dixie Linnenbrink</b>, is on medical leave, according to Energy Central. Blackmon has been the group's assistant director for telecommunications since the mid-1990s.</p>
<h3>Awarded:</h3>
<p>Two Southern Co. environmental engineers, <b>John Jansen</b> and <b>Larry Monroe</b>, received the Electric Power Research Institute (EPRI) Environment Sector Delivery and Application Research Champion Award. The award is given to engineers who use EPRI technology to benefit their customers.</p>
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<a href="/tags/cleco">Cleco</a><span class="pur_comma">, </span><a href="/tags/cleco-corp">Cleco Corp</a><span class="pur_comma">, </span><a href="/tags/commission">Commission</a><span class="pur_comma">, </span><a href="/tags/constellat">Constellat</a><span class="pur_comma">, </span><a href="/tags/constellation">Constellation</a><span class="pur_comma">, </span><a href="/tags/constellation-energy">Constellation Energy</a><span class="pur_comma">, </span><a href="/tags/dominion">Dominion</a><span class="pur_comma">, </span><a href="/tags/edison-electric-institute">Edison Electric Institute</a><span class="pur_comma">, </span><a href="/tags/electric-power-research">Electric Power Research</a><span class="pur_comma">, </span><a href="/tags/electric-power-research-institute">Electric Power Research Institute</a><span class="pur_comma">, </span><a href="/tags/electric-power-research-institute-epri">Electric Power Research Institute (EPRI)</a><span class="pur_comma">, </span><a href="/tags/epri">EPRI</a><span class="pur_comma">, </span><a href="/tags/iso">ISO</a><span class="pur_comma">, </span><a href="/tags/midwest-independent-transmission-system-operator">Midwest Independent Transmission System Operator</a><span class="pur_comma">, </span><a href="/tags/miso">MISO</a><span class="pur_comma">, </span><a href="/tags/nrc">NRC</a><span class="pur_comma">, </span><a href="/tags/nuclear">Nuclear</a><span class="pur_comma">, </span><a href="/tags/nuclear-regulatory-commission">Nuclear Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/pacific-gas-and-electric">Pacific Gas and Electric</a><span class="pur_comma">, </span><a href="/tags/security">Security</a><span class="pur_comma">, </span><a href="/tags/southwest-power-pool">Southwest Power Pool</a><span class="pur_comma">, </span><a href="/tags/transmission">Transmission</a><span class="pur_comma">, </span><a href="/tags/usec">USEC</a><span class="pur_comma">, </span><a href="/tags/usec-inc">USEC Inc.</a><span class="pur_comma">, </span><a href="/tags/washington-utilities-and-transportation-commission">Washington Utilities and Transportation Commission</a><span class="pur_comma">, </span><a href="/tags/western-electricity-coordinating-council">Western Electricity Coordinating Council</a> </div>
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Tue, 01 Jun 2004 04:00:00 +0000puradmin11042 at http://www.fortnightly.comPeoplehttp://www.fortnightly.com/fortnightly/2003/10/people
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>New Positions:</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>We welcome submissions to People, especially those accompanied by a high-resolution color photograph. E-mail to: <a href="mailto:photos@pur.com">photos@pur.com</a></p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - October 1 2003</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><blockquote><h1 class="dept">People</h1>
<h3>New Positions:</h3>
<p>The Pennsylvania Public Utility Commission (PUC) appointed <b>Thomas A. Leach</b> to a two-year term on its Consumers Advisory Council. Leach is the business manager and financial secretary of Local Union 126, International Brotherhood of Electrical Workers.</p>
<p>Cleco Corp. said board member <b>J. Patrick Garrett</b> is the first non-employee chairman of the board and that <b>Mike Madison</b>, state president of American Electric Power Louisiana/Arkansas, had joined the company as president and chief operating officer.</p>
<p>Avista Corp. appointed <b>Jack W. Gustavel</b> as a company director. Gustavel, president and CEO of Idaho Independent Bank, will stand for election in May. He is in line to replace <b>Sally Jewell</b>, who ended her term on the Avista board last May.</p>
<p>National Association of Regulatory Utility Commissioners (NARUC) President <b>Stan Wise</b> appointed California PUC President <b>Michael Peevey</b> as vice-chair of the DOE/NARUC Energy Market Access Partnership Board.</p>
<p>Puget Energy named <b>Stephen E. Frank</b> to its board of directors. Frank retired in 2002 as chairman, president, and CEO of Southern California Edison.</p>
<p>The Emissions Marketing Association board of directors appointed <b>Gary Payne</b>, an emissions trader for Dominion, to its board. Payne previously held positions with Aquila Merchant Services and Koch Energy Trading.</p>
<p><b>Kevin Evans</b> replaced <b>Bill Berry</b> as senior vice president and chief financial and administrative officer at the Electric Power Research Institute (EPRI). Evans was most recently CFO for technology company PlaceWare Inc.</p>
<p><b>W. Lance Wright</b>, a former Mobil Oil director, joined USEC Inc. as vice president of human resources and administration.</p>
<p><b>Paul Hudson</b> is the newest appointee for the Public Utility Commission of Texas. Gov. <b>Rick Perry</b> announced the appointment in late August, for a term that expires Sept. 1, 2009. Hudson is the director of policy in the governor's office, and he has past experience in energy development issues.</p>
<p><b>Gregory H. Boyce</b> joined Peabody Energy as its president and COO. He will also serve on the company's senior executive committee. Boyce previously was CEO for energy at Rio Tinto PLC.</p>
<p><b>Thomas L. Aller</b> will serve as interim executive vice president of Alliant Energy's Energy Delivery business unit, responsible for Alliant's utility subsidiaries. Aller has been with Alliant since 1993. Also, <b>Eliot G. Protsch</b>, executive vice president of Energy Delivery at Alliant and president of Interstate Power and Light, is Alliant's interim CFO, following the resignation of <b>Thomas M. Walker</b>, who stepped down to pursue other business interests.</p>
<p>OMHEX, a European securities company specializing in energy markets, named <b>Magnus Bocker</b> CEO and president, and <b>Jukka Ruuska</b> deputy CEO. The company was formed through the merger of Finnish company HEX and Swedish company OM.</p>
<p>Progress Energy named <b>Geoffrey S. Chatas</b> senior vice president of finance. Chatas most recently worked for AEP in the roles of senior vice president of finance, and as treasurer. He has been with AEP since 1997. <b>Wendy Hargus</b> will assume the duties of treasurer at AEP, which plans to consolidate its finance and treasury departments.</p>
<h3>Sentenced:</h3>
<p>A U.S. district judge sentenced former Enron Corp. Treasurer <b>Ben F. Glisan Jr.</b> to five years in prison and three years of supervised release after Glisan pleaded guilty to one count of conspiracy to commit securities and wire fraud, the Washington Post reported. Other charges were dropped as part of the plea agreement.</p>
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<a href="/tags/aep">AEP</a><span class="pur_comma">, </span><a href="/tags/alliant">Alliant</a><span class="pur_comma">, </span><a href="/tags/alliant-energy">Alliant Energy</a><span class="pur_comma">, </span><a href="/tags/american-electric-power">American Electric Power</a><span class="pur_comma">, </span><a href="/tags/avista">Avista</a><span class="pur_comma">, </span><a href="/tags/cleco">Cleco</a><span class="pur_comma">, </span><a href="/tags/cleco-corp">Cleco Corp</a><span class="pur_comma">, </span><a href="/tags/commission">Commission</a><span class="pur_comma">, </span><a href="/tags/doe">DOE</a><span class="pur_comma">, </span><a href="/tags/dominion">Dominion</a><span class="pur_comma">, </span><a href="/tags/electric-power-research">Electric Power Research</a><span class="pur_comma">, </span><a href="/tags/electric-power-research-institute">Electric Power Research Institute</a><span class="pur_comma">, </span><a href="/tags/electric-power-research-institute-epri">Electric Power Research Institute (EPRI)</a><span class="pur_comma">, </span><a href="/tags/epri">EPRI</a><span class="pur_comma">, </span><a href="/tags/michael-peevey">Michael Peevey</a><span class="pur_comma">, </span><a href="/tags/naruc">NARUC</a><span class="pur_comma">, </span><a href="/tags/national-association-regulatory-utility-commissioners">National Association of Regulatory Utility Commissioners</a><span class="pur_comma">, </span><a href="/tags/peabody-energy">Peabody Energy</a><span class="pur_comma">, </span><a href="/tags/progress">Progress</a><span class="pur_comma">, </span><a href="/tags/progress-energy">Progress Energy</a><span class="pur_comma">, </span><a href="/tags/public-utility-commission-texas">Public Utility Commission of Texas</a><span class="pur_comma">, </span><a href="/tags/southern-california-edison">Southern California Edison</a><span class="pur_comma">, </span><a href="/tags/usec">USEC</a><span class="pur_comma">, </span><a href="/tags/usec-inc">USEC Inc.</a> </div>
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Wed, 01 Oct 2003 04:00:00 +0000puradmin11308 at http://www.fortnightly.comPeoplehttp://www.fortnightly.com/fortnightly/2003/01/people
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>We welcome submissions to People, especially those accompanied by a Color Photograph. Send to:</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - January 1 2003</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><blockquote><p>Group president of Duke Energy's Energy Services, <b>Harvey Padewer</b>, has announced his resignation from the company, as has <b>Jim Donnell</b>, formerly president and chief executive officer of Duke Energy North America (DENA). Their resignations were part of organizational and management changes in the Energy Services and Gas Transmission divisions announced by Duke Energy President and Chief Operating Officer Fred Fowler on Dec. 4, 2002. The Energy Services group is being reorganized from a group structure into two major lines of business between international and merchant energy trading and marketing. This reorganization eliminates the group president roles from Duke Energy Transmission and Energy Services.</p>
<p>Michigan Public Service Commissioner <b>David Svanda</b> has been elected president of the National Association of Regulatory Utility Commissioners (NARUC). He also will continue as MPSC commissioner, a role he has served in since 1995. Svanda is a member of the Federal Communications Commission's Local and State Advisory Committee, past president of the Mid-American Regulatory conference, and an advisor to the MSU Institute of Public Utilities and the National Regulatory Research Institute.</p>
<p><b>Douglas Lake</b> and <b>John Dicus</b> resigned from ONEOK's board of directors. Both have served as Westar's representatives since ONEOK's purchase of Westar's Kansas gas distribution assets. Lake is executive vice president and chief strategic officer of Westar Energy, and Dicus is president and COO of Capitol Federal Savings Bank. Westar Energy is selling its ownership stake in ONEOK.</p>
<p><b>Richard Mathias</b>, former chair of the Illinois Commerce Commission, has joined PJM Interconnection at its new Chicago office to work as the local PJM liaison with Midwest policy-makers. Mathias led the ICC during the implementation of the 1997 Illinois electric restructuring law. At PJM he will focus on Illinois, Indiana, Kentucky, Michigan, Ohio and Tennessee.</p>
<p>Two new members have joined Contango Oil &amp; Gas Co.'s board of directors. <b>Joseph Comofelice</b>, president and CEO of Aquilex Services and a CPA, will chair the audit committee. <b>Michael Childers</b> is president of Entergy Asset Management.</p>
<p>USEC, a supplier of enriched uranium fuel for commercial nuclear power plants, has hired <b>Richard Miller</b> as managing director of corporate development. Miller's career in corporate and strategy development has encompassed Hewlett-Packard, Texas Instruments, Sun Microsystems and McKinsey &amp; Co.</p>
<p><b>Benjamin Fowke III</b> has been named vice president and treasurer at Xcel Energy. The former vice president and CFO of energy markets for Xcel replaces <b>Paul Pender</b>. Pender left to serve as CFO for TRANSLink Development, a partnership working to launch TRANSLink Transmission, a new independent transmission company to be owned by Xcel Energy and five other utilities.</p>
<p><b>Thomas King</b> has been appointed president of the PG&amp;E National Energy Group. His appointment follows the retirement of <b>Thomas Boren</b>, PG&amp;E NEG president and CEO and PG&amp;E Corp. executive vice president. King also will continue as PG&amp;E Corp. senior vice president.</p>
<p>Oak Ridge Micro-Energy announced the appointment of <b>George Metos</b> as vice president of strategic planning. Most recently, Metos was the chairman and founder of Kodiak Interactive Software. Oak Ridge Micro-Energy is a provider of micro thin-film energy sources.</p>
<p>PSEG has appointed <b>Laura Langer</b> as vice president-risk management and chief risk officer. Langer comes to PSEG from OPG&amp;E Corp., where she had been vice president-risk management. She also is the treasurer for the Committee of Chief Risk Officers.</p>
<h3 class="hook">We welcome submissions to People, especially those accompanied by a Color Photograph. Send to:</h3>
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<a href="/tags/benjamin-fowke">Benjamin Fowke</a><span class="pur_comma">, </span><a href="/tags/commission">Commission</a><span class="pur_comma">, </span><a href="/tags/communication">Communication</a><span class="pur_comma">, </span><a href="/tags/cpa">CPA</a><span class="pur_comma">, </span><a href="/tags/duke-energy">Duke Energy</a><span class="pur_comma">, </span><a href="/tags/entergy">Entergy</a><span class="pur_comma">, </span><a href="/tags/federal-communications-commission">Federal Communications Commission</a><span class="pur_comma">, </span><a href="/tags/icc">ICC</a><span class="pur_comma">, </span><a href="/tags/illinois-commerce-commission">Illinois Commerce Commission</a><span class="pur_comma">, </span><a href="/tags/interconnection">Interconnection</a><span class="pur_comma">, </span><a href="/tags/michigan-public-service-commission">Michigan Public Service Commission</a><span class="pur_comma">, </span><a href="/tags/naruc">NARUC</a><span class="pur_comma">, </span><a href="/tags/national-association-regulatory-utility-commissioners">National Association of Regulatory Utility Commissioners</a><span class="pur_comma">, </span><a href="/tags/national-regulatory-research-institute">National Regulatory Research Institute</a><span class="pur_comma">, </span><a href="/tags/pjm">PJM</a><span class="pur_comma">, </span><a href="/tags/pjm-interconnection">PJM Interconnection</a><span class="pur_comma">, </span><a href="/tags/translink">TRANSLink</a><span class="pur_comma">, </span><a href="/tags/transmission">Transmission</a><span class="pur_comma">, </span><a href="/tags/usec">USEC</a><span class="pur_comma">, </span><a href="/tags/xcel-energy">Xcel Energy</a> </div>
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Wed, 01 Jan 2003 05:00:00 +0000puradmin11132 at http://www.fortnightly.com